Baidu Gains as It Explores Making Its Own Electric Vehicles

Shares of Chinese search-engine giant Baidu gain on reports it is pondering getting into the making of electric cars.
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Shares of Chinese search-engine giant Baidu  (BIDU) - Get Report jumped nearly 10% on Tuesday after reports that it is pondering making its own electric vehicles.

Citing people with knowledge of the matter, Reuters reported that Beijing-based Baidu was considering contract manufacturing or setting up a majority-owned venture with automakers to produce electric cars.

Baidu reportedly has held preliminary talks on possible ventures with Zhejiang Geely Holdings, Guangzhou Automobile Group (GAC) and China FAW Group’s Hongqi, Reuters said, citing sources.

The initiative would be a step up from internet peers such as Tencent Holdings  (TME) - Get Report, Amazon.com  (AMZN) - Get Report and Google owner Alphabet  (GOOGL) - Get Report, which have also developed auto-related technology or invested in smart-car startups.

Baidu established autonomous driving unit Apollo in 2017. The division mainly supplies technology powered by artificial intelligence and works with automakers such as Geely, Volkswagen , Toyota  (TM) - Get Report and Ford  (F) - Get Report.

Baidu also operates autonomous taxi service Go Robotaxi, albeit with safety drivers on board, in Beijing, Changsha and Cangzhou, and plans to expand to 30 cities over the next three years. It gained approval last week to test five cars in Beijing without safety drivers.

Baidu last month posted better-than-expected third-quarter earnings and revenue that was in line with analysts' estimates amid a rebound in advertising revenue resulting from China's post-pandemic economic recovery. 

Baidu also announced last month that it had agreed to buy the Chinese live streaming business of JOYY Inc. for $3.6 billion in cash in a deal that is expected to close in the first half of 2021. The business includes the YY mobile app, YY.com website and PC YY.

Baidu’s Nasdaq-listed shares were up 9.78% at $178.90 in trading on Tuesday.