Image source: Internet
Baidu's potential partner for car manufacturing points to Geely Automobile.
On January 7, Reuters reported that Baidu plans to form a company to produce smart electric cars, and production will be carried out at Geely's factories. Among them, Baidu will have a majority stake and absolute voting rights in the new company, and Geely will hold a minority stake.
Reuters quoted sources as saying that the new company will use Baidu's in-vehicle software and Geely's engineering technology to transform some of Geely's existing car production facilities to produce cars. In addition, the two companies are discussing the use of Geely's Sustainable Experience Architecture (SEA) for future product development.
Future Auto Daily (ID: auto-time) separately asked Baidu and Geely Auto to respond to the rumor, and both parties said: "No comment."
Baidu's "travel dream" emerged in 2013. In 2013, Baidu began to bet on the field of autonomous driving, and in 2017 began to deploy the Apollo autonomous driving plan, which mainly provides artificial intelligence-driven technology, and has cooperation with Geely, Volkswagen, Toyota, and Ford.
However, from recent news, Baidu seems to want to move from behind the scenes to the front stage. Baidu and Geely have also been in contact for a long time.
On December 15, 2020, Reuters reported that Baidu had contacted Geely, Guangzhou Automobile Group, FAW Hongqi and other auto companies to discuss the establishment of joint electric vehicle companies, but as of that time, no decision had been reached. At that time, in response to the news, Baidu responded to Future Auto Daily (ID: auto-time) saying that it "does not comment", and Geely internal employees said that it "does not know yet."
At the Baidu AI Developer Conference in 2019, Geely Automobile Chairman Li Shufu personally went to the site for Baidu Apollo platform, and together with Baidu Chairman Li Yanhong demonstrated Geely’s car home interconnection function, and announced the AI for intelligent networking and intelligent driving. Technology launches comprehensive strategic cooperation in the fields of automobile and travel. At the same time, starting from the Geely Boyue PRO, Geely will be fully equipped with the GKUI19 system that integrates the small car interactive system.
The two companies have also cooperated at the capital level. In October 2020, Baidu led the A round of financing of the automotive intelligence company ECARX (ECARX), which is a strategic investment and independently operated automotive intelligence technology company of Geely Holding Group, focusing on automotive chips, smart cockpits, and smart Core technology products such as driving, high-precision maps, big data, and car networking cloud platform to create an open platform for intelligent networking.
The wave of electrification and intelligence is unstoppable. "From the perspective of the development of the three new car brothers, the capital market and the recognition of them by users have made traditional car companies jealous." Geely Auto's internal employees told Future Auto Daily.
In contrast, Geely's performance in new energy vehicles is worrying.
Official data show that in 2020, Geely Auto has sold 1,320,200 vehicles, a year-on-year decrease of 3%. In terms of new energy vehicles, Geely Auto's new energy and electrified products such as Geometry A, Geometry C, Emgrand EV, Emgrand GSe will only sell 68,142 vehicles in 2020, a drop of nearly 40% from 2019. The “Blue Geely Action” released by Geely in 2015 has set a goal for this: By 2020, the sales of new energy vehicles will account for more than 90% of Geely’s overall sales.
When deploying new energy vehicles, Geely chose a multi-brand strategy.
At present, Geely's electric layout includes its Geometry brand, Maple Leaf Automobile, and the electric brand Polestar jointly created with Volvo. In addition, the Lynk & Co ZERO mass-produced vehicle built by Geely and Volvo will be launched this year. The new smart brand, a joint venture between Geely and Daimler, also recently announced that it will release a new domestic electric compact SUV in 2022.
Lynk & Co ZERO concept Source: motortrend
However, the multi-brand strategy has pros and cons. The advantage is that it can broaden the brand positioning and target different users; the disadvantage is that the creation of a new brand requires manpower and material resources, and it also takes time to be recognized by the market, and resources are therefore scattered.
If it wants to break the game in the field of electric vehicles, Geely needs to tell some new stories, and Baidu’s "autonomous driving" label may add a bit of sexiness to this story. But it’s not that simple to write a new story.
"The current cooperation between companies is hoping to leverage or complement some of their shortcomings in order to achieve the purpose of blocking competitors." The above-mentioned employee told Future Automobile Daily, "but if this loose type or interest If the binding is not so tight, it is difficult to achieve the desired effect."
Affected by this news, Hong Kong stock Geely Auto's share price rose by 20% today, and closed at 33.25 Hong Kong dollars, with a market value of 326.431 billion Hong Kong dollars (approximately RMB 272.506 billion).
JP Morgan Chase upgraded Geely's rating from "Neutral" to "Overweight", and its target price was significantly raised from HK$18 to HK$50. Citi also issued a report, significantly increasing Geely’s target price to HK$57.9, and predicts that its pure electric vehicles will pose a challenge to Tesla’s market position
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