BEIJING, July 19 (Reuters) - A decision by the Trump

administration to sanction China's Xiaomi Corp ( XIACF ) in

early 2021 was the catalyst for the company's decision to build

its first electric car, CEO Lei Jun said on Friday.

Best known for its smartphones and home appliances, Xiaomi ( XIACF )

entered China's crowded EV market this year, part of its

strategy to diversify its product portfolio.

Speaking at an annual event in Beijing on Friday, Lei said

Xiaomi ( XIACF ) began to consider making an EV after what he called "an

accident," an announcement in the final days of the Trump

administration that put the Chinese company on a U.S. sanction

list.

"I received a phone call from a friend saying that we had

been sanctioned. It was like a bolt from the blue," said Lei,

who added that Xiaomi ( XIACF ) convened an emergency board meeting that

day that kicked off its scramble to develop an electric car.

"If it weren't for the huge impact of the unexpected U.S.

sanctions, we would not have rashly entered the complex

automotive industry," said Lei, who has developed a celebrity

following in China for splashy, live-streamed product reveals.

Friday's event, where Lei detailed Xiaomi's ( XIACF ) attempt to

launch an EV that would lure buyers from Tesla and established

luxury brands like BMW, Audi and Mercedes, was streamed by more

than 1.5 million people on WeChat.

Xiaomi ( XIACF ) challenged the 2021 sanctions in federal court and

won a reversal of the action that would have restricted U.S.

investment in May that year. By that time, Lei said he had

launched the development of what became the SU7, a sporty,

Porsche look-alike EV that starts below $30,000.

Lei said Xiaomi ( XIACF ) had turned down an offer from venture

capital to fund its early-stage EV operations that would have

valued the operation at $10 billion.

Xiaomi ( XIACF ) plans to deliver at least 100,000 SU7 EVs this year,

with a target of 120,000 sales. This represents a significant

increase from earlier this year, when the company initially set

its first-year sales target at 76,000 vehicles while determining

its production capacity.

Lei said the company had delivered over 25,000 EVs by the

end of June and expected to reach the 100,000-unit target by

November.

"I have to thank the accident three years ago," he said of

the sanctions, which spurred the company's drive to diversify

due to concerns they would harm its smartphone business.

The SU7 is only available in China. Lei said his target was

for Xiaomi ( XIACF ) to become one of the top five global automakers.

Donald Trump devoted a portion of his speech accepting the

Republican party's nomination for president on Thursday to the

EV industry, saying he would roll back stringent vehicle

emissions regulations driving a shift to electric cars.

Trump also said, if elected in November, he would slap

import tariffs of up to 200% on Chinese EVs built in Mexico,

although he has said he would support Chinese investment in

plants in the United States.