According to media reports, Baidu, China‘s largest search engine, is planning to set up an electric car company. The production of the electric cars, which are equipped with all kinds of intelligence, as befits a tech group, is to take place in plants of the Chinese automaker Geely, as Reuters reports, citing two sources familiar with the matter.
Baidu, effectively China‘s Google, will take a majority stake and absolute voting rights in the planned joint venture. The in-car software for the planned electric cars is to come from Baidu, while Geely is responsible for the vehicle technology know-how, the two sources said. The companies are in talks to use Geely’s Sustainable Experience Architecture (SEA) platform, which focuses on electric cars, for product development.
Baidu not only operates China’s most popular search engine, but is also recognized as a leader in developing software for autonomous driving. The tech group operates robotic taxis in several major Chinese cities, but there are also drivers in them for safety reasons. The merger of the two groups that are leaders in their fields shows how massively China is focusing on electric cars and how much Chinese companies are striving to increase their sales via this growth market. China is the world’s most important sales market for new vehicles: a good 40 percent of all new vehicles are sold there.
In addition to Baidu, a number of other Chinese technology groups have discovered the revenue potential in the car market. Alibaba has founded an e-car joint venture with China’s largest car manufacturer SAIC, Didi Chuxing has BYD produce electric cars for driving services. Tencent, China’s largest Internet company, has invested in Tesla and the Here geodata service, among others.
But Western tech companies are also increasingly relying on e-cars as a source of revenue: In view of Tesla’s success in commercializing electric cars, US internet giants such as Google’s parent company Alphabet and Amazon have also developed technologies for e-cars or in start-ups for intelligent ones invest in electric vehicles. Recently it was said that Apple wants to develop an electric car together with Hyundai.
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This is a consistent and clever merger. What is Europe doing ? Has SAP ever thought about entering this software growth market??