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Chinese tech giants bet $ 19 billion on global electric car frenzy

(Bloomberg) – China is shaping up to be the first real test of Big Tech’s ambitions in the automotive world, with giants from Huawei Technologies Co. to Baidu Inc. investing nearly $ 19 billion in companies from Widely Seen Electric and Autonomous Vehicles While Apple Inc. has long had plans for its own car and Alphabet Inc. has Waymo, its autonomous driving unit, the size – and speed – of the movement of Chinese tech titans places them at the forefront of this wider thrust. The allure is an industry that is becoming increasingly high-tech as it moves away from the combustion engine, with sensors and operating systems that make cars more of computers, and the prospect of a autonomy re-imagining how people will use them. new energy cars, China is a key battleground. Established automakers like Volkswagen AG and General Motors Co. are already doing this with local upstarts such as market darling Nio Inc. and Xpeng Inc. Over the past three months, Huawei, smartphone giant Xiaomi Corp., Baidu – which runs China’s top search engine and mapping app – and even Apple’s Taiwanese manufacturing partner Foxconn have joined the fray, forging ties and unveiling their own auto-building plans. the most important events in the world to present the hottest new trends in the automotive sector. Visitors lined up for hours to access the Huawei and Baidu pavilions, filling their screens and taking photos of sensor systems, high-tech dashboards and model vehicles. But despite the intense interest, the era of the new car is hyper-competitive in China, and the tech giants have a lot to prove. director of AlixPartners consulting firm in Shanghai and former executive of Ford Motor Co. “It’s about creating something new that doesn’t exist right now. That’s where the element of faith comes in. ”Huawei has been at the forefront, recently announcing plans to invest $ 1 billion in electric vehicles and its own autonomous driving technology, which it says has “already overtaken” electric car pioneer Tesla Inc. in The Shenzhen-based company, best known for its mobile phone networks and subject to crippling US sanctions, unveiled its first car developed with BAIC BluePark Mew Energy Technology Co. The Arcfox S midsize sedan uses HI, or Huawei Inside, a smart automotive software package that allows it to operate autonomously in urban areas for over 1,000 kilometers (620 miles) without human intervention. Delivery is expected to begin in the fourth quarter. Huawei’s auto show display drew larger crowds than China Evergrande New Energy Vehicle Group Ltd., an electric vehicle company that took one of the biggest booths. to present nine models despite the fact that it did not sell. a car under its own brand. In addition to the Arcfox S sedan, a Seres SF5 coupe equipped with Huawei Inside was on display, along with Huawei’s HiFin smart antenna solution, a next-generation on-board communication system and 4D imaging radar used to monitor roads and traffic. One of the biggest challenges for new entrants to the automotive industry is the amount of capital and resources required to manufacture cars. How tech companies negotiate this will be critical and potentially provide opportunities for established players in the industry, with Huawei repeatedly saying its plan is not to produce its own vehicles. Instead, it is partnering with three Chinese automakers – BAIC Motor Corp., Chongqing Changan Automobile Co. and Guangzhou Automobile Group Co. – to make self-driving cars that will carry its name as a sub-brand. build a “truly unmanned car” to be produced in 2024, President Feng Xingya said last month. The automaker will also cooperate with Huawei on big data, smart cockpits, hardware and microchips, Feng said. “China adds 30 million cars each year and the number is growing,” Huawei vice president Eric Xu said in April. “Even if we don’t tap the market outside of China, if we can make an average of 10,000 yuan ($ 1,550) for every car sold in China, that’s already a very big business.” Apple seems to be considering a similar path. at some point with automakers, including Hyundai Motor Co., before talks broke down. Unlike the Chinese tech giants, Apple is keeping its plans largely under wraps. The company lost a key official overseeing its self-driving car program in February, and it’s unclear what impact this might have had on Apple’s progress in delivering a commercially viable car. of autonomous driving opens up a series of possibilities for technology. businesses, including access to data such as real-time information on popular destinations and the routes taken to get there. On top of that, for some it is possible to charge for technological additions and system improvements, essentially treating the vehicle as computer hardware with constantly updated software. Zhang, general manager of the Shanghai-based consulting firm Autoforesight Co. That’s what these tech giants are doing. Their main income will not come from selling the car, but from finding other ways to earn after-sales, such as over-the-air system upgrades or software subscriptions. Big Tech in China is considering electric vehicles for a reason: Hyperdrive DailyFirst MoversBaidu – which started investing in robot taxi technology in 2013 and funded Chinese electric vehicle start-up WM Motors – now plans to spend $ 7 , $ 7 billion over the next five years to develop smart car technology through its new Jidu Auto unit. The division aims to launch its first model in three years, followed by new versions every 12 to 18 months, CEO Xia Yiping said. “The fundamental value of cars in the future will be their intelligence,” Xia said. a familiar refrain. “The earlier a company plans, the more control it acquires over the technologies developed itself, the more advanced technologies it has, the more power it will have in the market.” Jidu has a core team of around 100 employees and will expand to up to 3,000 by the end of next year, including up to 500 software engineers, he said. . The first batch of cars will be based on the pure EV manufacturing structure of Zhejiang Geely Holding Group Co., while Jidu will collaborate with Baidu’s Apollo autonomous driving unit, with special emphasis on smart cars and production in series of autonomous driving features. The unit will embark on its next fundraiser soon, with additional investments expected from Baidu and outside investors. Chinese smartphone maker Xiaomi has also announced plans to invest around $ 10 billion over the next year. decade to make electric cars, but did not reveal many details. or given a deadline for deliveries. Billionaire’s co-founder Lei Jun announced in March his plans to lead a new autonomous division and lead the transition to electric vehicles, in what he called his latest big startup. “We have big pockets for this project,” Lei, who is also Xiaomi. general manager, said during the unveiling of the plan. “I am fully aware of the risks of the automotive industry. I am also aware that the project will take at least three to five years with tens of billions of investments. While Chinese tech giants may be behind the game and enter uncharted territory, it could work to their advantage, Dyer said of “It’s not an industry where you have to be first. up for grabs, ”he said. “In fact, in the auto industry, the first comer usually never wins. It is always the follower who wins. Because when you are the first to come, you pay to learn from all the mistakes. For more articles like this, please visit us at bloomberg.com Subscribe now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP


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