Two people familiar with the matter said that China’s Baidu plans to form a company to manufacture smart electric vehicles (EVs), which will be manufactured at a factory owned by the automaker Geely.
Baidu, China’s leading search engine company, will have a majority stake and absolute voting rights in the new company.
Sources told Reuters that the joint venture will switch to some of Geely’s existing car manufacturing facilities to manufacture cars and use Baidu’s in-vehicle software input and Geely’s engineering knowledge.
One of the sources said that the two companies are discussing the use of Geely’s electric vehicle-focused platform Sustainable Experience Architecture (SEA) for future product development, but since the plan is private, the source declined to be named.
Baidu, which is developing autonomous driving technology and Internet connectivity infrastructure, did not immediately respond to a request for comment. Geely declined to comment.
After Reuters reported on the plan, Baidu’s NASDAQ-listed stock rose by more than 4%.
Reuters had reported last month that Baidu was considering producing its own electric cars and had negotiated with Geely, Guangzhou Automobile Group (GAC) and China FAW Group’s Hongqi Automobile on possible joint ventures.
Baidu’s rival Alibaba has formed an electric car joint venture with China’s largest automaker SAIC, while China’s Didi Chuxing is working with BYD to make electric cars designed for ride-hailing services. Tesla has achieved success in the commercialization of electric vehicles. Internet giants including Tencent, Amazon, and Alphabet have also developed car-related technologies or invested in smart cars Startups. People familiar with the matter said that last month Apple was pushing the design of electric cars and batteries, with the goal of launching in 2024.
Geely Automobile Group, headquartered in Hangzhou, is expanding electric vehicle production. Geely Automobile Group is China’s largest automaker. The group has made group investments in Volvo Cars, Daimler and Malaysia’s Proton. The share price of its main listed company, Geely Automobile, rose 10% on Friday, and the company aims to sell 1.53 million vehicles this year.
© Thomson Reuters 2020
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