China's Tech Giant Baidu Registers a New ‘Intelligent EV Company' with Automaker Geely
Chinese tech giant Baidu Inc, which is the equivalent of Google in China, is launching a new "intelligent EV company" with automaker Zhejiang Geely Holding Group (Geely). The joint venture company will focus on "New Energy Vehicles" (NEVs), which are classified as fully-electric and plug-in hybrid models.
The name of the new company translates to "JIDU Auto." The joint venture between a tech company and major automaker is unprecedented in the auto industry.
The new company was formed with a registered capital of 2 billion yuan (US$309.4 million). Baidu will hold a 55% stake in the joint venture. The other 45% will be held by Shanghai Maple Automobile Co., Ltd., a company which Geely serves as the majority shareholder.
According to Chinese data and analytics platform Qichacha, JIDU Auto's businesses will cover the technical service and technology development related to new energy vehicles (NEVs), vehicle production, the manufacture of auto parts and vehicle sales.
JIDU's corporate structure will have five board seats, three of which will be controlled by Baidu, according to Chinese automotive news outlet Gasgoo.
Xia Yiping will serve as chief executive officer of JIDU Auto and will also have a seat on the board. Yipiong was the co-founder and former chief technology officer of bike-sharing company Mobike.
"Right now, the venture is progressing very well. We have a CEO on board, and we have decided on the brand of the new vehicle," Robin Li, co-founder and CEO of Baidu, said at the company's Q4 earnings call.
He said that it usually takes around 3 years to launch a new EV model and Baidu is trying to keep the same pace for the new venture.
Geely is one of China's best-selling automotive brands and will contribute its expertise in automobile design and manufacturing at scale. Geely is also the parent company of Swedish automaker Volvo Cars.
Baidu's plans to form a new joint venture car company with Geely were first revealed in early January.
"As a top Chinese automaker with global reach, Geely has the unique experience and resources to design, produce and market energy-efficient, reliable and safe automobiles in large scale. 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 CEO of Baidu in January when news of the plans was first revealed.
Baidu has been working on autonomous driving, mobility services vehicle connectivity and smart infrastructure as part of its open Apollo platform, which is designed to speed up the development of self-driving cars through collaboration with industry partners.
Baidu launched Apollo in 2017 and since then the company has made steady progress in the field of autonomous driving. The company will provide its intelligent driving capabilities to the new venture.
Since its launch, more than 100 companies have joined Baidu's Apollo platform, including Geely, Mercedes Benz, BMW and Toyota.
The joint venture company with Geely is another example of a tech company teaming up with an established automaker to jumpstart the development of advanced technology, such as autonomous driving and connected car technology, which are poised to transform the auto industry over the next decade.
Automakers General Motors, Volkswagen AG and Ford Motor Co. have entered into similar partnerships, although on this scale.
In 2016, U.S. automaker General Motors invested around $1 billion to acquire a stake in San Francisco-based self-driving startup Cruise. The autonomous driving technology developed by Cruise will be used in future GM vehicles.
In 2017, GM's U.S. rival Ford Motor Co. announced a $1 billion investment in Pittsburgh-based autonomous driving startup Argo AI to help jumpstart its own work on autonomous driving technology. German automaker Volkswagen invested $2.6 billion in Argo AI and is also using the company's technology for its future autonomous capable vehicles.
Alphabet subsidiary Waymo is also working on autonomous driving, as well as an autonomous ride-hailing service called Waymo One.
Waymo spun out of Google's early self-driving car project over a decade ago and with the backing of its parent company Google over the years has become the industry leader in self-driving technology in the U.S., with over 20 million miles driven on public roads and billions more in simulation.
But unlike Baidu, Waymo is not planning to jointly develop a vehicle with an established automaker. Whereas the new JIDU Auto joint venture will combine the strengths of automaker Geely with a with one of the world's biggest tech companies for the first time.
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