China’s Baidu Inc plans to form a company to make smart electric vehicles (EV) of which the manufacturing is planned to be carried out at plants owned by automaker Geely., according to Reuters report.
It is the latest Chinese conglomerate to venture into the electric vehicle market, following shopping giant Alibaba and private transportation giant Didi Chuxing.
The manufacturing of electric vehicles would also represent an extension of Baidu’s ambition to enter transportation. Baidu has been working on autonomous driving technology for years and is the leading Chinese company in the autonomous vehicle space.
Baidu’s Nasdaq-listed shares jumped more than 4% after Reuters reported the plan.
Baidu is likely to form a new joint venture with Geely for the electric vehicle effort, as per Reuters reports, and is reported developing autonomous driving technology for the vehicle while Geely focuses on hardware. Specifically, Baidu and Geely are in talks to use the latter’s scalable electric vehicle platform that it announced late last year. But Baidu is said to have a majority stake in the new company.
The Chinese government has spent years focusing its largest companies on green technology development in an attempt to beat other world powers in practice. Beijing has hinted that a ban on gasoline cars was on the horizon since 2017 (before finally rolling out a policy late last year) and announced a generous subsidy policy for clean vehicles, leading to an incredible boom in sales of new electric vehicle companies.
Geely already has investments in Volvo cars and has a partnership with Mercedes-Benz’s parent company, Daimler. And it also has its hand in everything from passenger drones to high-speed rail to a recently proposed satellite network.