Chinese IT Giant Baidu Enters BEV Manufacturing Sector

New entrants from other businesses have been increasing in China’s automotive industry in recent years. Baidu, China’s major IT giant, is one of those businesses. In January 2021, Baidu announced that it would establish a new smart BEV manufacturing company, named Baidu Automobile, in partnership with Geely Holding Group, a privately-owned Chinese automobile company. Their investment relationship has not been disclosed, but Baidu will have dominant share, taking the lead in management. After the announcement, Baidu, which is listed in the United States, was flooded with stock buy orders, and its market capitalization exceeded 80 billion USD for the first time in two years.

According to Baidu’s announcement, the new company will engage smart BEV development based on technologies that Baidu has cultivated so far such as artificial intelligence (AI), the Apollo open platform for autonomous driving technology development, IOV OS (internet of vehicles operating system) and Baidu’s map service “Baidu Map.” Geely will cooperate with Baidu Automobile in terms of manufacturing, including the use of Geely’s self-developed SEA (Sustainable Experience Architecture).

Let’s see why Baidu decided to directly enter BEV manufacturing business. As an IT company, Baidu is good at utilizing big data. Baidu, which started developing autonomous driving-related technology in 2013, has formed partnerships with major Chinese automobile manufacturers in order to obtain large amount of data. However, ordinary demonstration experiments are not enough to develop Level 4 or higher highly automated driving technologies. It is indispensable to accumulate a huge amount of data obtained from ordinary drivers driving in all road conditions.

Algorithms related to autonomous driving are required at the beginning of technological development. However, as technology matures driving data that Baidu does not have becomes more valuable, while automakers become less eager to provide such data to Baidu. If Baidu cannot obtain a huge amount of data, the company will have difficulty to advance autonomous driving technology and realize fully autonomous driving.