© Reuters/ALY SONG A logo of Baidu is seen during the World Internet Conference (WIC) in Wuzhen
BEIJING (Reuters) - China's search engine giant Baidu Inc said on Monday it will set up a company to partner with car maker Zhejiang Geely Holding Group to make smart electric vehicles (EV), the latest move by a tech company in the fast-evolving sector.
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Baidu, which has been developing autonomous driving technology and internet connectivity infrastructure, said the new EV company will count on Baidu's intelligent driving capabilities and Geely's car manufacturing expertise.
Geely will also be a strategic investor in the new company, which will be an independent subsidiary of Baidu, Baidu said in the statement.
Reuters reported Baidu's plan to form a smart EV company with the help of Geely last week. Sources told Reuters Baidu would hold a majority stake and absolute voting power in the new firm and that Geely would have a minority stake.
Geely said in a separate statement on Monday the collaboration will be based on Geely’s EV-focused platform, Sustainable Experience Architecture (SEA).
Baidu's move comes as many tech companies around the world are racing to develop smart cars, after Tesla Inc's success in commercialising EVs.
Apple is pushing to design an electric vehicle and batteries, aiming at a possible 2024 launch, sources told Reuters last month.
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Chinese ecommerce giant Alibaba has 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 automaker BYD.
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Baidu established its autonomous driving unit Apollo in 2017. The unit mainly supplies technology powered by artificial intelligence and works with automakers such as Geely, Volkswagen AG, Toyota Motor Corp and Ford Motor Co.
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Baidu operates autonomous taxi service Go Robotaxi with safety drivers on board in Beijing, Changsha and Cangzhou, and plans to expand to 30 cities in three years, which analysts say is a potential scenario for Baidu to eventually commercialize its automous driving technoglogies. It gained approval last week to test five cars in Beijing without safety drivers.
Baidu's car-making plan is likely to strengthen the concept of 'software-defined vehicles,' said Jason Chen, transportation analyst at researcher Analysys.
'However, the success of Baidu’s car making will also depend on support from government policies, equipment cost reduction, and user demand.'
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All automakers need to transform themselves into more tech-oriented companies as intelligent connectivity will play a much more important role, said Shi Ji, an analyst at Haitong International.
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(Reporting by Yingzhi Yang and Yilei Sun in Beijing and Brenda Goh in Shanghai; Editing by Tom Hogue and Ana Nicolaci da Costa)