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Baidu’s Robin Li has new EV partner

What might an Apple Car look like? Would it be as revolutionary for its sector as the iPhone proved for the telecoms world? Car industry commentators have anticipated a prototype from the world’s most admired brand for at least six years, only to learn that the project, titled ‘Titan’, has been mired in setbacks and uncertainty. But might that be changing? Last week South Korea’s Hyundai Motor confirmed that it was in talks with Apple to build a new range of self-driving electric cars. The partnership, should it fully materialise, could see 100,000 next-generation electric vehicles (EVs) made at a Kia factory in Georgia as early as 2024.

Tesla (whose shares have already climbed by another 20% this year at time of writing) will be watching closely. But perhaps it had an eye on another challenger this week when Baidu, China’s largest search engine and a major investor in autonomous driving technology, announced a deal with Geely Automobile, China’s leading privately-held carmaker, to make self-driving EVs, initially focusing on passenger cars.

The venture, in which Baidu will hold a majority stake, is seen as a more promising one due to the complementary strengths of the duo. Baidu will bring its Apollo self-driving software system, into which it has ploughed more than Rmb10 billion ($1.54 billion) in investment since 2017. Geely – the owner of Volvo and a key shareholder in Daimler – will be responsible for the manufacturing line, using an open-source platform that it launched in September for electric vehicles.

Baidu’s founder and CEO Robin Li had earlier claimed that the company had no plans to build cars of its own, but would concentrate its efforts on advancing the artificial intelligence-engineered operating systems that guide the vehicles of the future.

That Baidu platform, sometimes described as an Android for automobiles, has signed up about 130 partners including Volkswagen, Ford, BYD, Microsoft and Geely’s own Volvo Cars.

But Baidu’s position seems to have shifted as the race to put driverless cars on the road sped up last year. Google’s Waymo started to offer robo-taxi services in Arizona, for instance, while Amazon’s Zoox is said to be preparing a “carriage-style” vehicle that claims to be dispensing with steering wheels, brakes and accelerator pedals.

At home in China there is frenzied competition for a breakthrough in the same sector courtesy of telecoms behemoth Huawei, which is pitching its smart-driving technology to carmakers such as BYD and BAIC Group, most notably LiDAR sensors that deploy lasers to detect distance, shape and orientation (see WiC500).

Alibaba, Tencent and Didi Chuxing are all investing heavily in ‘mobility’, including EV too (see WiC521).

By revealing its plans to build its own cars with one of the most reliable auto manufacturers in China (and arguably one of the most politically well-connected; see WiC368), Baidu is looking for another way to monetise the technological advances that Apollo has achieved. In fact, it was the first company to receive driverless road test licences in both China and the US. A review by California’s Department of Motor Vehicles last February also reported that Baidu’s Apollo was better than Google’s Waymo in terms of ‘disengagement rate’, which measures the frequency in which human intervention is required in a driverless ride. The findings have been much disputed but the Apollo system reported one disengagement for every 18,050 miles of travel, while Waymo was logged at a case every 13,219 miles.

How Baidu’s venture with Geely will impact on its existing partnerships with WM Motor, in which it is an investor, is unclear. Baidu has also collaborated with FAW to develop China’s first EV robo-taxi under the Hongqi brand, supporting the ride-hailing service that Baidu launched in Beijing in October (see WiC447).

The news of the Geely partnership, which leaked long before the official announcement, has already given Baidu’s Nasdaq-listed shares a major jolt (see WiC453). Soaring nearly 16% on January 8 alone, they have pushed Baidu’s market value to $81.9 billion, its highest level since August 2018. Geely’s Hong Kong-listed shares also hit a record high at one point as sentiment surrounding EV stocks spilled over.

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