The collaboration with Geely can give Jidu a big boost when it comes to the notoriously difficult business of making cars in high volume and with high reliability, says Tu Le, CEO of Sino Auto Insights, an analyst firm focusing on China’s automotive sector. He adds that China’s automotive industry is electrifying at a faster pace than either Europe or the United States because of government policies, a less entrenched gasoline-powered industry, and because such a large population allows new technologies to catch on faster.
Robo-1 shows how big, innovative and fast-moving China’s automotive industry is, he says Mingyu Guan, partner at the consulting firm McKinsey & Company, which focuses on the sector. Guan says most of China’s major Internet companies are developing car technology in some way, and consumers expect an app-like experience in their vehicles. “China is like a leading lighthouse for the industry,” Guan says.
Baidu’s leap into automobile manufacturing with Jidu is also a sign of China’s technological industrial development. Over the past few years, major Internet, social media, and popular app companies have been subject to increased regulatory scrutiny and pressure, for example, with strict new rules on data protection and algorithmic transparency.
The Chinese government has also signaled an intention to tighten the Internet while encouraging the development of technologies of long-term economic importance. Baidu and other companies are apparently eager to reinvent themselves by focusing on “deep technology” that is considered more valuable by the state, including technologies for electric vehicles and autonomous driving. Baidu’s latest quarterly results, released in May, also show revenue from Baidu AI Cloud increased 45 percent year over year in the first quarter of 2022, while online marketing revenue fell 4 percent. Net loss for the period was $ 133 million.
Baidu has made significant investments and received government encouragement for autonomous driving. In November 2017, the Chinese government named Baidu one of a handful of AI “national masters” and gave the company the responsibility of building an autonomous driving platform that could be used across the industry. The government’s support also gave Baidu a leg up in working with existing car companies. In March, the company published over 3,700 patent applications related to the technology in China. And in April, Apollo Go, Baidu’s autonomous taxi service, already operating in 10 cities in China, received the country’s first permit to testing of autonomous vehicles without a driver behind the wheel of Beijing.
Apollo also integrates with a smart-city platform, which Baidu sells and which has been taken into use by 41 cities in China. This platform promises to help local authorities predict and manage congestion, road safety and pollution using artificial intelligence. Baidu CEO Robin Li highlighted the potential for autonomous driving to reduce traffic accidents, congestion and carbon emissions in China at Baidu’s annual developer conference held in December 2021.
Jidu will no doubt be encouraged by the broader advances that China’s automotive industry has made, largely driven by the advent of electric vehicles. China’s sales of electric vehicles increased 169 percent in 2021 compared to a year earlier, according to data from China Passenger Car Association, an industry association. For 2021, electric cars accounted for 14.8 percent of Chinese car sales compared to 4.1 percent in the United States. Chinese car companies are also now exports an increasing number of electric cars to Europe.