China search giant Baidu considers making own electric vehicles

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BEIJING – China’s Baidu Inc is considering making its own electric vehicles and has held talks with carmakers about the possibility, said three knowledgeable people, the latest step in a race between tech companies to develop smart cars.

The search engine leader, which is also developing autonomous driving technology and internet connectivity infrastructure, is considering contract manufacturing, one of the people said, or establishing a majority stake with car makers.

The initiative would be a step forward from internet peers such as Tencent Holdings Ltd, Inc and Alphabet Inc, who have also developed or invested car-related technology in smart car start-ups.

Baidu has held preliminary talks – without making decisions – with automakers, including Zhejiang Geely Holding Group Co Ltd, Guangzhou Automobile Group Co Ltd (GAC) and China FAW Group Corp Ltd’s Hongqi, about a possible venture, the people said.

They refused to be identified because the conversations are private.

Baidu declined to comment. GAC said it has a strategic partnership with Baidu and any further collaboration has been discussed. Geely said it was unfamiliar with the matter. FAW did not respond to a request for comment.

Baidu founded the autonomous driving unit Apollo in 2017. The unit primarily delivers technology powered by artificial intelligence and partners with automakers such as Geely, Volkswagen AG, Toyota Motor Corp and Ford Motor Co.

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Baidu operates the Go Robotaxi autonomous taxi service with security drivers on board in Beijing, Changsha and Cangzhou, and plans to expand to 30 cities within three years. It received approval last week to test five cars in Beijing without safety drivers.

Discussions on production come after Didi Chuxing launched a purpose-built ride-hailing service van last month with automaker BYD Co Ltd. Meanwhile, technology giant Sony Corp unveiled an electric concept car with self-driving features in January.

Building cars would represent a dramatic development in Baidu’s drive to diversify revenue streams as growth platforms in its core search business, where sales grew just 2% last year.

Baidu’s stocks listed on Nasdaq received a 5% boost in premarket trading. Shares of Geely’s Hong Kong-listed subsidiary Geely Automobile Holdings rallied 5% in the afternoon. Shares of GAC were up about 1%.

(Reported by Yingzhi Yang and Yilei Sun in Beijing and Brenda Goh in Shanghai; edited by Christopher Cushing, Robert Birsel)