The Baidu Inc. logo will be displayed at the company’s headquarters in Beijing, China on July 3, 2019.
Wan Xiaojun | Visual China Group via Getty Images
GUANGZHOU, China – Chinese internet giant Baidu has entered into a strategic partnership with automaker Geely to create a standalone electric vehicle unit, the companies confirmed on Monday.
The new entity will operate as an independent subsidiary of Baidu, the company announced on Monday.
CNBC first reported the news on Friday, citing someone familiar with the matter.
Beijing-headquartered Baidu will be the majority shareholder, while Chinese automaker Geely will take a minority stake, the person told CNBC.
Geely’s Hong Kong-listed shares rose modestly 0.45% on Monday after rising nearly 20% on Friday. Baidu’s US-listed shares rose over 15% at close of trading on Friday.
Geely will be responsible for actually manufacturing the vehicles. Baidu will focus on the software and technology in the car. The search giant has already tested its driverless car software Apollo in public Robotaxi trials in Beijing.
Baidu also has its own map app and voice assistant technology called DuerOS that can be fitted in a vehicle.
China’s market for electric vehicles continues to grow, supported by government support such as subsidies and the establishment of a charging infrastructure.
Domestic electric car manufacturers Nio, Li Auto and Xpeng Motors reported an increase in deliveries for December. Baidu hopes to be a part of the electric vehicle action.
“China has become the world’s largest market for electric vehicles and we are seeing EV consumers demanding that next-generation vehicles get smarter,” said Robin Li, Baidu CEO, in a statement.
The electric car market is becoming increasingly competitive as companies push the production and release of new vehicles.
On Saturday, Nio released its first sedan called the et7. Apple iPhone maker Foxconn signed a deal with Chinese electric car maker Byton to support the production of its first vehicle.