World’s largest games publisher and most indebted real estate developer form venture to develop operating system for smart vehicles

China Evergrande and Tencent Holdings to establish a venture in smart vehicle operating system, respectively contributing 60 per cent and 40 per cent capital

New entity is expected to further fuel increasing competition in China’s smart vehicle and green car industry

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Published: 9:00pm, 15 Mar 2021Updated: 10:23pm, 15 Mar 2021

China Evergrande and Tencent Holdings have agreed to set up a company to develop an operating system for smart vehicles, as competition heats up amid Beijing’s push to accelerate the roll-out of automobiles that run on non-fossil fuels and artificial intelligence.

An electric vehicle unit of Evergrande, the largest Chinese real estate developer by sales, and the most indebted builder, will own 60 per cent of China Evergrande New Energy Vehicle Group, while Tencent’s unit Beijing Tinnove Technology will own the remaining 40 per cent, according to a filing to the Hong Kong stock exchange.

The venture, which aims to develop its own intellectual property right over the operating system for smart cars follows the national blueprint of integrated transport network unveiled last month to enhance the integration of smart technology in the transport industry and boost the development of smart vehicles. Together with new energy vehicles (NEVs), the smart vehicle segment will be key for companies to compete for market share in the world’s largest car market.

“Both parties are expected to [maximise] their respective capabilities in new energy vehicle research and development, manufacturing, artificial intelligence, big data, cloud computation, commuting and other fields, [with the aim of] creating a world-leading smart vehicle ecosystem,” the filing said.

China Evergrande and Tencent Holdings will set up a company to co-develop smart vehicle operating system as competition heats up amid Beijing’s push to accelerate smart and green vehicles. Photo: Handout

China is also set to become the world’s biggest market for EVs by 2025, when 4 million cars, or one in every five vehicles, will be powered by electricity, according to the government’s development blue print. That growth has attracted China’s technology giants including Huawei Technologies, Tencent, the search engine Baidu and this newspaper’s owner Alibaba Group Holding to up their ante in intelligent EVs since 2020.

The ultimate goal for the next generation of cars is autonomous driving, because of technologies such as the Internet of Things (IoT), 5G, cloud services and artificial intelligence have assumed great importance. To underscore the point, Li Shufu – founder of China’s largest car assembler Geely Automobile Holdings – said cars are now defined by software, rather than the conventional production line.