The logo of Baidu Inc. will be displayed at the company’s headquarters on July 3, 2019 in Beijing, China.
Wan Xiaojun | Visual China Group via Getty Images
GUANGZHOU, China – Chinese internet giant Baidu has entered into a strategic partnership with carmaker Geely to create a standalone electric vehicle unit, the companies confirmed on Monday.
The new unit will operate as an independent subsidiary of Baidu, the company said Monday.
CNBC first reported the news on Friday, citing a person familiar with the matter.
Beijing-based Baidu will be the majority shareholder, while Chinese carmaker Geely will take a minority stake, the person told CNBC.
Hong Kong-listed shares of Geely rose 0.45% on Monday, after climbing nearly 20% on Friday. US-listed shares of Baidu were up more than 15% at close of trading on Friday.
Geely will be responsible for the actual manufacture of the vehicles. Baidu will focus on the software and technology in the car. The search giant has already tested its self-driving car software, called Apollo, in public robot taxi tests in Beijing.
Baidu also has its own map app and voice assistant technology called DuerOS, which can be installed in a vehicle.
The Chinese electric vehicle market continues to grow, helped by government support such as subsidies and the construction of charging infrastructure.
Domestic electric carmaker Nio, Li Auto and Xpeng Motors all reported increases in deliveries for December. Baidu hopes to join the electric vehicle campaign.
“China has become the world’s largest market for EVs (electric vehicles) and we see EV consumers wanting to make the next generation of vehicles more intelligent,” said Robin Li, CEO of Baidu.
The electric car market is becoming increasingly competitive with companies ramping up the production and introduction of new vehicles.
On Saturday, Nio released its first sedan, the et7. Apple iPhone maker Foxconn signed a deal with Chinese electric carmaker Byton to help produce its first car.