(Yicai Global) Feb. 19 -- Shares in Xiaomi soared as much as 12 percent today after reports emerged that China’s most popular smartphone manufacturer is planning to join the country’s crowded new energy vehicle market by making electric cars. Xiaomi has yet to confirm or deny the reports.

Xiaomi’s shares [HKG:1810] closed up 6.42 percent at HKD30.65 (USD3.95). Earlier in the day they had reached HKD32.30.

"Please wait for a follow-up announcement," financial media Cailian Press said on its microblogging Weibo account, citing Xiaomi's response. 

Xiaomi is determined to make electric cars although the exact route has yet to be determined, the Late Post reported this afternoon, citing people familiar with the matter. Founder Lei Jun may lead the carmaking project in person, it added. 

It is hardly a surprise that Lei plans to make cars, a Xiaomi employee told Yicai Global. Lei is already an investor in EV startup Nio through his venture capital firm Shunwei Capital. He has also invested in Guangzhou-based Xpeng, although he held less than 5 percent stock when they both went public in 2018 and 2020 respectively.

Beijing-based Xiaomi bought into digital map firm Careland in 2014 and was a strategic investor in in-car service system developer Shanghai Pateo Electronic Equipment Manufacturing last year. It has been applying for invention patents in automobile cruise speed, energy boosters, vehicle control, navigation, auxiliary driving, driver safety and other areas since 2015. 

The NEV sector is the darling of investors at the moment. Li Auto is backed by the Changzhou government in southeastern Jiangsu province, Nio has secured investment from Hefei in eastern Anhui province and WM Motor has support from Shanghai. 

Editor: Kim Taylor