China’s search giant Baidu Inc will establish a company to make smart electric vehicles (EV) and would collaborate with Geely. Sources familiar with the matter that was first broached in December 2020, said that manufacturing is to be carried out at plants owned by automaker Geely.

Baidu will have a majority stake and absolute voting power in the new company. The arrangement is expected to significantly revamp some of Geely’s existing car plants to make the vehicles, with in-car software input from Baidu and engineering expertise from Geely.

Back in December, Reuters had already reported that Baidu was contemplating making its own EVs and had held talks with Geely, Guangzhou Automobile Group Co Ltd (GAC) and China FAW Group Corp Ltd’s Hongqi on a possible venture.. But the sources have now confirmed talks between both companies.

The companies are in talks to use Geely’s EV-focused platform, Sustainable Experience Architecture (SEA), for subsequent product development, one of the sources, who declined to be identified as the plan was private, said.

Baidu, which is developing autonomous driving technology and internet connectivity infrastructure, did not immediately respond to a request for comment. Geely declined to comment. Baidu’s shares at the New York Stock exchange surged on Friday.

Baidu’s competitor Alibaba has already formed an EV joint venture with China’s biggest automaker SAIC Motor Corp while China’s Didi Chuxing is making EVs designed for ride-hailing services with BYD. Drawing from the huge success of Tesla Inc in the commercialization of EVs, internet companies have expanded their operations to foster the development of automobile technology and investments. Informed sources said that Apple
Is also planning a move into automaking and could be designing an electric vehicle and batteries.

Geely is reputed to be China’s highest-profile automaker due to its stakes in Volvo, Daimler AG, and Malaysia’s Proton. The company is expanding its operations into EV production. Shares of Geely Automobile increased by 10% in the NYSE on Friday.

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