Baidu’s EV Venture to Invest $7.7 Billion in Smart Car Business

By Adriaan Brits Friday, April 23, 2021

Jidu Auto, an electric vehicle (EV) joint venture (JV) of Baidu and Geely, said it plans to make a business investment of ¥50 billion ($7.7 billion) in smart car production over the following five years, the CEO of the company told Reuters.

Baidu headquarters in Shenzhen, China.

Focus on EVs and Smart Cars

Chief executive Xia Yiping said the startup company is set to receive business investment from Baidu and other investors to roll out its first EV in three years, or even earlier. The smart car is expected to look like a “robot,” he said, adding that the startup company would look at market data before deciding on a model.

"It will make you feel like it's a robot that can communicate with you with emotions," said Xia.

The EV startup plans to launch a new car every one or one-and-a-half years after it rolls out its first EV. The startup said it is looking to hire between 2,500 and 3,000 employees over the next two to three years, including 400-500 software engineers, Xia said.

The company expects to produce cars in Hangzhou Bay using Geely’s open-source vehicle platform. Geely has a number of production plants at that location while it intends to sell its EV and smart car units directly to customers rather than using dealerships.

Chinese internet giant Baidu and Zheijang Geely Holding Group announced in January the companies were teaming up to launch a new EV company, where the former owns 55% while the latter holds a 45% stake.

The move comes as dozens of tech companies around the globe are rushing to develop their own smart car following Tesla’s massive success in commercializing electric vehicles.

Traditional carmakers, EV startup companies, as well as tech giants like Apple, are all pouring business investments into the development of next-gen EV and smart car units that feature self-driving systems and high-end in-car entertainment systems.

Chinese smartphone company Xiaomi and mobile telecom business Huawei are also looking to enter the auto market. The latter introduced its new smart car last Sunday and said it plans to infuse $1 billion annually into the research and development in this field.

“Competition will be extremely fierce in China with tech giants joining the game, and different companies are approaching the EV sector in different ways,” said Paul Gong, a UBS analyst.

“Baidu’s strength for example is its intelligent driving capabilities while Huawei is good at both software and hardware. No one knows who will be the winner.”

At the moment, the startup business is considering using Baidu’s chips which have been used in various smart car technologies over past years, including self-driving systems, HD maps, cloud and more. Baidu launched its first autonomous driving unit Apollo in 2017.

“The yet-to-be-launched model will integrate Baidu’s most advanced autonomous driving technologies and AI capabilities,” Robin Li, chairman and chief executive of Baidu, said in March. Li said he is confident that Jidu’s product will be one of the best-selling smart cars.

Summary

Jidu Auto, a China-based startup business set up by Baidu and Geely, announced plans to invest $7.7 billion into the production of smart cars over the next five years.

About the Author


Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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