Chinese handset maker Xiaomi has formally announced plans to enter the automotive industry with a new smart electric vehicle (EV) business.

The firm will initially invest 10 billion yuan ($1.52 billion) in a wholly-owned subsidiary, with a total investment goal of $10 billion over the next 10 years, the company said on Tuesday in a filing. 

Xiaomi CEO and founder Lei Jun will also serve as CEO of the smart electric vehicle unit, the company said.

Before the plan, the Beijing-based technology company said it had already carried out research and development related to automobiles and started exploring peripheral technologies. 

The handset maker has 834 auto-related patents, in which the invention patents exceed 96 percent, according to PatSnap, a SaaS platform providing intellectual property listing service.

Read more: Is Xiaomi prepared to step in the NEV sector?

Xiaomi's move to the EV market is not a complete surprise, as Lei has already invested in NIO through his venture capital firm Shunwei Capital, which was NIO's first institutional investor. Lei has also invested in Guangzhou-based Xpeng.

In 2014, Xiaomi bought into digital map firm Careland. Last year, the handset maker became a strategic investor in in-car service system developer Shanghai Pateo Electronic Equipment Manufacturing. 

(Cover via CFP)