In a bid to diversify revenue streams, Chinese search giant Baidu Inc. will partner with auto maker Zhejiang Geely Holding Group to create electric cars. Baidu, a platform that operates China’s most popular internet search engine, has been constantly trying to get into the auto industry, and is also regarded as one of the world’s leading developers of automated driving technology.
This is not out of the ordinary for Baidu, as many global and Chinese car manufacturers have initiated such partnerships. These partnerships help them share the multibillion-dollar costs of developing electric vehicles for China under government pressure to meet sales quotas. Under the country’s Made in China 2025 industrial strategy, Beijing revealed its aims of leading the world in 10 areas of technology by the middle of the next decade. This includes the NEV (new-energy vehicles) sector.
Baidu established autonomous driving unit Apollo in 2017. The unit mainly supplies technology powered by artificial intelligence, and works with automakers such as Geely, Volkswagen AG, Toyota Motor Corp and Ford Motor Co. Baidu has also been busy testing autonomous driving and recently rolled out a robotaxi fleet.
The company’s to-be partner in car manufacturing, Geely is a giant privately-owned car manufacturer and has an impending merger with Sweden’s Volvo. Its brands include the namesake Geely, Lynk & Co, Geometry, and Polestar, all of which sell electric automobiles. It is also the biggest shareholder in Malaysia’s Proton and Britain’s Lotus.
Manufacturing cars would signify dramatic progress in Baidu’s push to expand income streams, as growth plateaus in its core search business, where revenue grew just 2% last year.
The new undertaking will operate as a Baidu subsidiary, whereas Geely will serve as a strategic partner. While the former will provide smart driving technologies, the latter will take care of designing and manufacturing.
“We believe that by combining Baidu’s expertise in smart transportation, connected vehicles and autonomous driving with Geely’s expertise as a leading automobile and EV manufacturer, the new partnership will pave the way for future passenger vehicles.” said Robin Li, co-founder and chief executive officer of Baidu.