A Xiaomi executive says Smartmi is researching electric vehicles out of interest, forming a small team that is doing very early work.

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Media reports yesterday said that Xiaomi has a plan for it to build cars in parallel with a subsidiary company. An executive at the smartphone giant denied the plan today but confirmed that the subsidiary has indeed formed an electric vehicle (EV) team.

Wang Hua, general manager of Xiaomi Group's public relations department, said on his personal Weibo account today that Xiaomi has no plans to build cars in two parallel lines, denying a report by local media outlet 36kr yesterday.

Xiaomi will not be directly involved in strategic decisions from its holding subsidiary Smartmi, he said, adding that Smartmi is researching EVs out of interest, forming a small team that is doing very early work.

Smartmi has joined the car-building bandwagon and the first model will be an SUV, 36kr said yesterday, citing people familiar with the matter. Some car design firms are already approaching Smartmi to discuss vehicle design work, according to the report.

Smartmi aims to build passenger cars, with the first model being an SUV, the report said, adding that the company's car-building business remains separate from Xiaomi and no apparent support for Smartmi from Xiaomi's administrative system has been seen.

Smartmi is one of the many companies in the Xiaomi ecosystem, whose main products include air conditioners and air purifiers. Unlike other Xiaomi ecosystem companies, however, it is a controlling subsidiary of Xiaomi.

Information from data provider Tianyancha shows that Xiaomi co-founder Liu De holds a 95 percent stake in Beijing-based Smartmi, giving him effective control. Liu often holds shares in its eco-chain companies on behalf of the Xiaomi Group.

Xiaomi subsidiary Smartmi reportedly jumps on car-making bandwagon