Jidu Auto, an electric vehicle venture between China’s tech giant Baidu (BIDU.Q) and Chinese automaker Geely (0175.HK), aims to plough 50 billion yuan ($7.7 billion) into producing smart cars over the next five years.
Baidu was co-founded in 2000 by Internet pioneer Robin Li, creator of visionary search technology Rankdex, a method of hyperlink analysis.
He set out to provide the best and most equitable way for people to find what they’re looking for and built a company culture predicated on two principles: simplicity and reliability.
In order to provide intelligent, relevant search results for the tens of billions of queries that are entered into its search platform every day, it focuses on powering the best technology, optimized for up-to-date local tastes and preferences.
Its deep understanding of the Chinese language and culture is central to its success in its home market, and this understanding has allowed it to tailor its search technology for its users’ needs.
Geely Automobile Holdings Limited, on its part, is an automobile manufacturer, focusing on the development, manufacturing, and sales of passenger vehicles.
The Company sells most of its products in the China market and has also expanded its sales through export to other developing countries in the past few years.
The Company’s shares are listed on the main board of The Stock Exchange of Hong Kong Limited (“SEHK”).
The controlling shareholder of the Company is Zhejiang Geely Holding Group Company Limited. This is a private company incorporated in the People’s Republic of China (the “PRC”) which is wholly owned by Mr. Li Shu Fu.
With its headquarter established in Hangzhou, the PRC, and 9 manufacturing plants across China.
The Group has a total annual production capacity of 1,710,000 units of vehicles per double shift as of 31 December 2018.
The Group sells its 17 major vehicle models (including the “Lynk&Co” vehicle models sold by the Group’s 50%-owned joint venture, namely “Lynk&Co JV”) developed under 4 platforms & 2 modular architectures.
Xia Yiping said on Friday that the funding would come from Baidu and other investors.
Jidu aims to launch its first electric vehicle (EV) in three years, as is standard for the industry, but would make efforts to speed this up.
The sector of electric vehicles has been gaining popularity in the past couple of years. In fact, it’s estimated the market for these automobiles will reach 26,951,318 by the year 2030, up from 3,269,671 units two years ago.
Its first EV would look like a “robot” and would target young customers, Xia said, adding that Jidu would analyse big market data before deciding on a final model.
“It will make you feel like it’s a robot that can communicate with you with emotions,” said Xia, who co-founded and served as chief technology officer at Chinese bike-sharing firm Mobike until it was acquired by Meituan (3690.HK) in 2018.
Baidu’s Hong Kong-listed shares jumped as much as 1.34% after Reuters reported Jidu’s investment plan.
The launch of the new auto company in January comes as tech companies around the world are racing to develop smart cars after Tesla’s (TSLA.O) success in commercializing EVs.
Jidu plans to release a new model every one or one-and-a-half years after its first launch, Xia said, without giving a sales target.
It plans to hire 2,500 to 3,000 people over two to three years, including 400 to 500 software engineers.
Shanghai and Beijing based Jidu also plans to roll out its branding in the third quarter of 2021, Xia said.
Xia said Jidu, which will use Geely’s open-source electric vehicle platform, hopes to make cars in Hangzhou Bay in China’s eastern city of Ningbo, where Geely has several plants.
It plans to sell its car directly to customers to begin with, without using dealerships.
Chinese search engine company Baidu in January announced it would set up the company with Zhejiang Geely Holding Group (GEELY.UL) to leverage its intelligent driving expertise and Geely’s car manufacturing capabilities.
As explained by CNBC, Baidu is the majority shareholder, owning 55% of Jidu while Geely has a 45% stake.
Jidu is considering using chips designed by Baidu, which has over the years developed smart car technologies including autonomous driving, high-definition maps and cloud.
Baidu first established its autonomous driving unit Apollo in 2017.
Smartphone maker Xiaomi and telecom giant Huawei Technologies (HWT.UL) are among other Chinese tech giants harbouring auto ambitions.