Baidu to create electric car firm
Chinese internet search giant forms strategic partnership with vehicle maker Geely
Chinese internet search giant Baidu announced on Jan 11 that it plans to establish an intelligent electric vehicle company and has formed a strategic partnership with auto manufacturer Zhejiang Geely Holding Group as the country’s new energy vehicle market moves into the fast lane.
It is an inevitable trend that more technology companies will make forays into the emerging new energy vehicle sector, ramp up production and roll out new smart vehicles in a bid to seek new growth engines and expand business landscapes, industry experts said while noting that competition in the sector will intensify.
The new company, which will be an independent subsidiary of Baidu, will oversee the entire industrial chain, from vehicle design and research and development to manufacturing, sales and service, Baidu said in a statement.
The Beijing-based technology behemoth will produce the vehicles with intelligent driving capabilities while Geely will contribute its expertise in automobile design and manufacturing.
Baidu will support the new company’s growth with its full portfolio of core technologies, including Apollo autonomous driving, DuerOS voice assistant for Apollo and Baidu Maps.
The company aims to reshape intelligent vehicle offerings and bring about a revolution in intelligent transportation.
“China has become the world’s largest market for electric vehicles, and we are seeing EV consumers demanding next generation vehicles be more intelligent,” said Robin Li, co-founder and CEO of Baidu.
Li said Baidu has long believed in the future of intelligent driving, and over the past decade it has invested heavily in artificial intelligence to build a portfolio of self-driving services.
“The collaboration marks a significant expansion into auto making for Baidu, which is in need of a new platform to showcase its accumulated cutting-edge technologies, such as autonomous driving, intelligent connected vehicles and artificial intelligence, as well as to promote its technology upgrades,” said Jiang Zheng, an expert at the research and development center affiliated with Guangzhou Automobile Group.
Jiang noted that Baidu only served as a supplier of technology solutions when partnering with other car manufacturers in the past and could not give full play to its overall strengths, especially in the self-driving segment.
“It is of great significance that Geely, as an automobile and EV manufacturer, is teaming up with Baidu. Vehicle manufacturing is a typical asset-heavy industry that requires huge investments, covering land, production facilities and factory construction, and may take a long time,” Jiang said.
China’s NEV market will see robust growth in the next five years, driven by government promotion, investments from vehicle manufacturers and advancements in battery technology, according to global market research company IDC.
According to the latest development plan for the NEV industry from 2021 to 2035 approved by the State Council (China’s Cabinet) in November, the nation’s NEV sales are expected to account for 20 percent of all new vehicle sales by 2025, and vehicles used in public transportation will be completely electrified by 2035.
It may take two or three years for Baidu to mass produce its intelligent electric vehicles, said Zhang Xiang, an automobile analyst at the new energy and intelligent connected car industry think tank of the Ministry of Industry and Information Technology.
“China’s internet companies... have encountered some development bottlenecks, such as facing difficulties in making profits,” said Zhang, adding that they hope to find new business growth points, and developing autos in collaboration with traditional automobile makers is a good choice.
Statistics from the China Association of Automobile Manufacturers show that about 200,000 NEVs were sold in November in China, more than double the previous year.