Thursday, January 14, 2021

Geely Makes Push Into Electric Vehicle Market With Foxconn and Baidu

Chinese carmaker Geely, widely credited for reviving Proton’s fortunes, is making an aggressive push into the electric vehicle market, signing separate deals with Taiwanese electronics manufacturer Foxconn and Chinese search giant Baidu.

Geely’s partnership with Foxconn, well-known as a major Apple supplier, would involve them providing contract manufacturing for other carmakers. According to Reuters, the companies would each have a 50% stake in a venture that will also provide automakers with consulting services on electric vehicle (EV) technologies. News reports indicate that Apple itself is likely to launch a self-driving electric vehicle by 2024.

Earlier in the week, Geely announced that it was linking up with Baidu to design and manufacture electric vehicles. Industry observers view the partnership as an effort to challenge US carmaker Tesla’s current global dominance in the electric vehicle market.

“We believe that by combining Baidu’s expertise in smart transportation, connected vehicles and autonomous driving with Geely’s expertise as a leading automobile and EV manufacturer, the new partnership will pave the way for future passenger vehicles,” said Baidu CEO Robin Li, according to the BBC.

Bloomberg, citing a source knowledgeable on the matter, reported that Baidu would hold a majority stake in the new electric car company. Bloomberg’s source further said that the pact was aimed at pushing Apollo’s adoption in more vehicles. Apollo is Baidu’s AI-powered autonomous driving platform. However, the Bloomberg report did note that it was unclear if self-driving cars were on the partnership’s roadmap.

The reason behind Geely’s spate of deals may simply have to do with pragmatism. Sources told Reuters that Geely wants to make better use of the production capacity of its factories in China. Geely Automobile, its main listed company, can churn out over 2 million vehicles a year, but only sold about 1.32 million last year.

Geely is better known in Malaysia as national carmaker Proton’s strategic partner, having acquired a 49.9% stake in the latter in 2017. Since then, Proton sales and revenue have seen a tremendous turnaround, breaking with years of steep losses. The carmaker hit a 8-year sales high just in July last year.

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