Carmakers are increasingly open to collaboration with rivals and tech companies as they begin seriously to confront the huge challenge of ditching the internal combustion engine to tackle the climate crisis. The investment required to develop electric cars has helped spark a wave of partnerships, with companies teaming up to spread the costs.
Baidu’s car company will focus on passenger vehicles and operate as an independent subsidiary, according to its statement on Monday. Baidu will also utilize its artificial intelligence capabilities and mapping systems.
Geely, which owns Volvo, said in its statement that the company has been trying to transform from a car manufacturer to “a tech company” focused on “intelligent, electric transport.”
No further details about the partnership have been disclosed.
Shares in Geely hit a record high on Monday before closing down 2.6%. The stock soared nearly 20% on Friday, its best day since November 2008, after Reuters reported the company would team up with Baidu.
Baidu shares closed higher last Friday on Wall Street, up 16% to $240.25.
Jill Disis contributed to this report.