BEIJING — China's Baidu Inc plans to form a company to make smart electric vehicles (EV), two sources familiar with the matter said, with manufacturing to be carried out at plants owned by automaker Geely.
Baidu, the leading search engine company in China, will take a majority stake and absolute voting power in the new company.
The venture will revamp some of Geely's existing car manufacturing facilities to make the vehicles, with in-car software input from Baidu and engineering know-how from Geely, sources told Reuters.
The companies are in talks to use Geely's EV-focused platform, Sustainable Experience Architecture (SEA), for future product development, one of the sources, who declined to be identified as the plan was private, said.
Baidu, which is developing autonomous driving technology and internet connectivity infrastructure, did not immediately respond to a request for comment. Geely Holding Group, which also has separate electric car brands, said Monday the venture with Baidu would focus on intelligent and connected vehicles. It gave no details of investment or when products might be released.
Baidu's Nasdaq-listed shares jumped more than 4% after Reuters reported the plan.
Reuters had already reported last month that Baidu was contemplating making its own EVs and had held talks with Geely, Guangzhou Automobile Group Co Ltd (GAC) and China FAW Group Corp Ltd's Hongqi on a possible venture.
Baidu's rival Alibaba has formed an EV joint venture with China's biggest automaker SAIC Motor Corp while China's Didi Chuxing is making EVs designed for ride hailing services with BYD. Cheered by Tesla Inc's success in commercialisation of EVs, internet giants including Tencent Holdings Ltd, Amazon.com Inc and Alphabet Inc, have also developed auto-related technology or invested in smart-car startups. People familiar with the matter said last month Apple is pushing to design an electric vehicle and batteries, aiming at a possible 2024 launch.
Privately held Geely, best known abroad as the owner of Sweden’s Volvo Cars, is one of China’s biggest independent automakers. Its brands include Geely, Lynk & Co., Geometry and Polestar, all of which sell electric vehicles. Geely is the biggest shareholder in Malaysia’s Proton and Britain’s Lotus. Shares of its main listed company, Geely Automobile, which aims to sell 1.53 million vehicles this year, jumped over 10% on Friday.
Global and Chinese automakers have launched partnerships to share the multibillion-dollar costs of developing electric vehicles for China under government pressure to meet sales quotas.
China is the world’s biggest market for the technology, accounting for about half of global sales. The ruling Communist Party spent billions of dollars on subsidies in an attempt to take an early lead in the industry. It is shifting the burden to manufacturers by requiring them to earn credits from selling electric vehicles or face penalties that have yet to be announced.
Information from The Associated Press was used in this report.
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