Tencent-backed electric-car start-up ropes in Toyota’s China partner for self-driving cars
Shanghai-based electric vehicle start-up NIO has forged a strategic alliance with GAC Group, which manufactures cars with Toyota and Honda in China.
NIO, the Shanghai-based electric vehicle start-up backed by Tencent Holdings and Baidu, added Toyota’s China partner to its list of allies as it sought to secure access to manufacturing know-how and shorten its learning curve.
Formerly known as NextEV, NIO on Thursday signed a strategic cooperation agreement with GAC Group, which produces cars with Toyota and Honda in China.
The start-up will own 55 per cent of the joint venture, which will explore connected cars and autonomous driving technologies, engage in vehicle research, share suppliers and develop a car-rental business, according to a statement by Guangzhou-based GAC.
NIO is one of a few dozen electric car start-ups that have sprouted in recent years after China’s government started handing out special manufacturing permits to companies outside the traditional car making industry. To encourage sales, the government also gave out research and development grants and consumer subsidies, and exempted new-energy vehicles from ownership quotas in its biggest cities.
China’s plan to promote electric vehicles as a way to cut down on its reliance on imported oil and reduce pollution has also dovetailed with its other aim of gaining leadership in key internet-based technologies. Connected and self-driving cars are seen as the natural amalgamation of several complementary technologies that China is seeking to dominate.
Backed by Chinese tech giants such as Tencent, Baidu and Xiaomi, NIO also counts Singapore’s Temasek Holdings and Tesla’s second-biggest institutional investor Baillie Gifford & Co among its shareholders.