Chinese internet giant Baidu reportedly plans to invest US$ 100 million in the country’s electric car maker NextEV (in Chinese), in a renewed drive to boost its faltering autonomous driving business. The details of the deal have not been made public; TechNode has reached to Baidu for confirmation, but the company declined to comment.
The alliance between Baidu and the electric car startup is another major move for the internet technology giant to turn itself around after being hit by falling profits. Baidu is now betting big on artificial intelligence to spur its future development. Baidu set up Institute of Deep Learning in 2013, marking the commencement of its research and development on unmanned driving technology.
Yet, the Chinese internet giant has failed to yield concrete results despite its tie-ups with car makers such as BMW and Chery Automobile over the past three years. The exit of its core team members including senior vice president Wang Jin, who was in charge of the autonomous car division, worsened the already muddy prospects.
As the first company tapping into unmanned vehicles in China, Baidu claims that it has no intention to build cars but instead will focus on unmanned driving technology-related software, providing sensor modules and self-driving car brain to its partners. The collaboration with NextEV is in line with such strategy.
Founded in November 2014, NextEV is committed to the research, development and production of high performance electric sports cars. The Shanghai-headquartered company has offices in Europe and the United states, with more than 2,500 employees around the world. Last year, it launched its first electric car — the NIO EP9 in London.
The electric vehicle startup has raised more than US$ 600 million via three funding rounds since June 2015 and the tie-up with Baidu will be its series D funding round. Investors include Sequoia Capital, Tencent, JD.com, Hillhouse Capital, Joy Capital, Temasek, and TPG Growth (in Chinese).
The autonomous driving industry is expected to enter a rapid development period with policy support and technical innovation. By 2020, the country’s Automatic Data Acquisition System (ADAS) market segment alone is estimated to reach RMB 20 billion (in Chinese).
As electric vehicle and unmanned driving technologies have been changing industry rules and profit distribution patterns in the automobile manufacturing sector, an increasing number of startups are jumping onto the bandwagon to seize the golden opportunity, apart from traditional Chinese electric car makers.
The market is assumed to be commercially viable that even some outsiders such as Chinese video-streaming giant LeTV hopes to grab a slice of the pie. LeTV, which has been reportedly working on the research and development of electric cars, showcased the LeSEE Pro — a new concept car, at a special event in San Francisco last October.
With more players joining the race, this purchase could set Baidu up for success as competition in this field gets harsher.