Tesla’s Lawsuit Elevates Xiaomi’s Role in the Evolving Electric Vehicle Landscape
Tesla’s Lawsuit Elevates Xiaomi’s Role in the Evolving Electric Vehicle Landscape

Tesla’s Lawsuit Elevates Xiaomi’s Role in the Evolving Electric Vehicle Landscape

Tesla’s Lawsuit Elevates Xiaomi’s Role in the Evolving Electric Vehicle Landscape


On September 5, 2023, Tesla (Shanghai) Co., Ltd. took legal action against IceZero Intelligent Technology (hereinafter referred to as “IceZero Technology”) for alleged “infringement of trade secrets and unfair competition.” This move has unexpectedly thrust the relatively modest IceZero Technology into the spotlight and raised questions about the dynamics of the electric vehicle (EV) industry.

David vs. Goliath:

In stark contrast to the automotive giant Tesla, IceZero Technology is a startup that has been in operation for just over a year, with last year’s orders totaling a modest ¥15 million (approximately $2.4 million USD). However, what makes IceZero Technology particularly intriguing is its role in Xiaomi’s automotive ecosystem. Tesla’s legal action against this fledgling company suggests a growing unease in the EV industry and signals a potential challenge to Xiaomi’s expanding automotive supply chain.

The Core of the Dispute – Current Sensors:

IceZero Technology specializes in automotive current sensors, a critical component for managing energy efficiency and safety in new energy vehicles. Currently, this sector is dominated by foreign brands such as LEM and Honeywell, and only a few domestic manufacturers possess the capability for mass-producing automotive-grade current sensors. Some industry experts speculate that Tesla’s lawsuit against IceZero Technology may be linked to the company’s key personnel. IceZero Technology’s founder previously worked in a critical role at Sensata, a supplier for Tesla. Notably, Sensata is Tesla’s exclusive supplier for high-voltage main circuits and fast-charging system direct-current contactors.

Whether IceZero Technology’s technology alignment with Tesla’s former supplier triggered the dispute remains to be seen and will likely be determined in court. On the other hand, some industry insiders view IceZero Technology as a reserve player within Xiaomi’s supply chain rather than an irreplaceable one.

Xiaomi’s Expanding Influence:

IceZero Technology is one of the many companies in Xiaomi’s automotive supply chain. In March of this year, Xiaomi’s Smart Factory Investment Fund invested ¥389,000 (approximately $62,000 USD) in the company, securing an approximate 11.86% stake. Joining the investment was the Xianfeng Evergreen Fund, which focuses on early-stage investments in technology and consumer sectors. Both funds, contributing equal amounts, are now the second-largest shareholders of IceZero Technology, trailing only the founder, Mr. Jia Yongping, who retains a 46.3% stake.

Despite its short existence of just two years, Xiaomi’s automotive ambitions have grown significantly. The company has completed two fundraising rounds, totaling ¥9.03 billion (approximately $1.45 billion USD). Xiaomi’s Smart Factory Investment Fund has been actively investing in various aspects of the automotive industry, including integrated circuits, upstream and downstream sectors, lithium batteries, and automobiles. According to Enterprise Check (Qi Cha Cha) data, since Xiaomi announced its foray into the automotive sector in March 2021, Xiaomi-affiliated companies have invested in more than 50 automotive-related projects across various segments.

The Bigger Picture:

Xiaomi founder Lei Jun has expressed grand ambitions for the automotive industry, aiming to rank among the world’s top five automakers with annual shipments exceeding 10 million vehicles. This mirrors Tesla’s objective of achieving annual global sales of 20 million vehicles. With both companies potentially competing head-on in the EV market, it is clear that the automotive sector is entering a phase of intense rivalry.

Despite Tesla’s legal action targeting Xiaomi’s automotive supply chain, the immediate impact may be limited. Xiaomi’s automotive venture has been progressing smoothly, with some recent developments even surpassing initial expectations. The company’s summer testing is reportedly proceeding well, and its plans for mass production and market entry in 2024 remain on track.


Tesla’s lawsuit against IceZero Technology underscores the heightened competition within the automotive industry and suggests that even Xiaomi’s ambitions in the sector may be viewed as a threat. While it is still uncertain whether Xiaomi’s forthcoming EV, slated to debut next year, will become a disruptive force in the industry, one thing is clear: the automotive landscape is evolving rapidly, and no player is willing to yield an inch. The market’s future promises to be increasingly competitive, and the automotive industry’s great shakeup is only just beginning.

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