Tesla faces a new foe as China's search engine Baidu allies with Volvo's owner Geely to make electric cars

Baidu, which already runs a huge open-source autonomous-driving platform, plans to use Geely’s production and development capabilities, according to sources

It joins a crowded field of Chinese carmakers backed by tech giants racing to challenge the dominance of Tesla

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The search giant’s diversification into the smart EV sector will will not come as a surprise to many. Photo: Reuters

Published: 8:28pm, 8 Jan 2021Updated: 9:54pm, 8 Jan 2021

China’s leading search engine, Baidu, has entered the fray to take on Tesla and a clutch of domestic smart electric car makers through a new partnership with vehicle manufacturer Geely.

Baidu, which already runs one of the world’s largest open autonomous-driving platforms, plans to use Geely’s production facilities and development capabilities to reinforce its foray into car manufacturing, according to two sources with knowledge of the matter. Shares of Geely Automobile shot up by a fifth in Hong Kong on Friday.

An agreement between Baidu and Zhejiang Geely Holding Group, which owns Volvo Cars and a stake in Daimler, will be signed soon, the sources said.

Baidu joins a crowded field of more than 200 licensed electric car makers of all shapes and stripes, many of them backed by China’s major technology companies. Alibaba Group is invested in Xpeng, while Tencent backs NIO.

The sources said the new partnership would represent more than the creation of a car making joint venture. Reuters reported on Thursday that Baidu will take a majority stake and absolute power in the company, which will builds its own cars.