Baidu earned a neat three percent bump in stock prices on Thursday after they recorder higher-than-expected revenues. One project that they’ll be spending the cash on is their driverless car unit, a research and development effort spanning between the U.S. and China.
“We believe that the automobile is the next major computing platform,” said CEO Robin Li during a call with analysts, forecasting an “aggressive” spend on the project.
Mr Li’s comments come just a few days after LeEco CEO Jia Yueting said that he considers the car “a smart mobile device on four wheels.”
Like Baidu, LeEco has invested heavily in their auto projects, which involve electric and self driving concepts as well as their connected car ecosystem.
The two also share another interesting feature: deadlines. LeEco has committed to releasing their Aston Martin electric sports car by 2018, while their strategic partner Faraday Future aims to have autonomous electric vehicles on sale by 2020.
Similarly, Baidu has set a 2018 release date for their autonomous concept, and a 2020 production deadline.
Shoot First, Monetize Later: The Battle To Own The Smartphone On Wheels
The ‘shoot-first, monetize later’ model has become a feature of Baidu’s expansion beyond their core search business.
The company is also embroiled in an cash-burning war over the O2O space with competitors Alibaba and Tencent. The search giant doubled down on investment in the area, including a $3 billion USD commitment to their group-buying site Nuomi. The company is now applying the same tactics to their autonomous driving unit.
“We are aggressively beefing up research and development in this area both here in China and our U.S. R&D center in Silicon Valley,” said CEO Robin Li in a post-earnings conference call. “We will worry about the business model later on.”
LeEco CEO Jia Yueting has also brushed off concerns about his company’s potential to make good on their massive valuation, as they continue to welcome new funding.
Mr. Jia claims LeEco’s electric cars will retail for less than Tesla rivals, but will profit from the connected ecosystem, drawing close parallels with smartphones. He has even gone as far as to suggest that the cars themselves could ultimately be free.
LeEco and Baidu join a raft of other Chinese entrants looking to capitalize on cars as a computing platform, similar to smartphones. Tencent-backed Next EV is planning to release an electric vehicle concept that is half the price of a Tesla by 2017.