(Yicai) July 29 -- The second factory of the electric vehicle arm of Chinese smartphone giant Xiaomi has reportedly begun construction in the Beijing Economic-Technological Development Area and will kick off production next year.

"The project started construction in early July and is expected to come on stream next year," National Business Daily reported on July 26, citing a worker. The construction equipment has already been deployed, and some areas have begun initial site leveling, the report noted.

On July 25, the BETDA said on its website that Xiaomi Auto recently invested CNY842 million (USD116 million) to buy an industrial land plot of about 530,000 square meters for the construction of new energy vehicle and component manufacturing facilities, which will have a total investment of over CNY2.6 billion (USD358.3 million).

The new project, which is expected to achieve an annual output value of more than CNY16 billion (USD2.2 billion) once completed, is adjacent to Xiaomi Auto's first factory.

Xiaomi Auto released its first mass-produced EV model, the SU7, in March, priced from CNY215,900 (USD29,780). As of June 30, the company had delivered more than 30,000 units, achieving nearly one-third of its annual sales target.

The new factory will have a limited impact on the production capacity of the SU7 because it will be mainly used to make Xiaomi Auto's second and third models, according to industry insiders. The second model will be a coupe sports utility vehicle, expected to hit the market in the first half of next year.

Editor: Futura Costaglione