Chinese tech companies have never been afraid of leaping into areas outside their core businesses. But the next jump they're making is risky, even for big firms: a shift to making electric vehicles.
China's EV market has become piping hot, with a parade of internet behemoths foraying into the car manufacturing business over the past six months. In a policy paper published last November by the State Council, China's cabinet, Beijing spelled out its plan to reach 20% penetration of new energy vehicles by 2025. By 2035, the government envisions EVs will become the dominant new vehicles sold in the country.
As Beijing makes a heavy push to produce more energy-saving vehicles, tech companies, ranging from the old moneyed giants like Baidu and Alibaba to smartphone makers like Huawei and Xiaomi, have been stepping up efforts to gain a foothold in the world's largest EV market.
China added 30,000 new energy vehicle-related companies in the first quarter of 2021, a 298% increase from the same period last year, according to data from Tianyancha, a comprehensive database on Chinese firms. In this fast-evolving EV sector, internet companies are up against not only traditional and established automakers, but also upstarts in the autonomous driving sector, such as NIO and Xpeng Motors.
Here's a list of Chinese tech companies that have in recent months announced plans to make EVs:
Alibaba
The ecommerce giant was the first among China's tech giants to get its hands dirty in the EV maker space. In December 2020, Alibaba set up a three-way EV joint venture with China's biggest carmaker SAIC Motor, a state-owned company, and Shanghai Zhangjiang Hi-Tech Park Development, an investment arm of the Shanghai municipal government. In January, the joint venture launched its first car model, a sedan, under the brand "IM."
Apart from its latest EV push, Alibaba has been developing driverless driving technology. In 2018, Alibaba set up an autonomous driving lab under its global research arm Damo Academy. The tech giant is also a major backer of the domestic EV startup Xpeng Motors.
Baidu
Search engine giant Baidu in January established a joint venture with China's largest private automaker Zhejiang Geely Holding Group to make smart electric vehicles.
Baidu, which has been transitioning into an AI powerhouse, has been investing in autonomous driving technology since 2013. In 2017, Baidu launched Apollo, a self-driving platform. Apollo launched driverless car-hailing services on May 2. The Apollo project is separate from Baidu's joint venture with Geely. But Apollo's smart driving capabilities will be applied in manufacturing the first Baidu-Geely car model.
Xiaomi
On March 31, Xiaomi CEO Lei Jun announced the smartphone maker would set up an EV subsidiary, and said the company would invest $10 billion over the next decade in the smart EV business.
Didi
Didi Chuxing, China's car-hailing unicorn, perhaps is the closest to the EV business among the tech companies that have recently moved to make cars.
In 2019, Didi Chuxing formed a joint venture with the domestic automaker BYD to make EVs designed for ride-hailing services. BYD is the controlling shareholder of the venture.
On April 18, Didi Chuxing announced a partnership with Volvo to develop self-driving cars for a planned future self-driving taxi fleet.
In a separate attempt to step up its EV making efforts, Didi is also building an EV subsidiary, for which it's actively poaching talents from automakers, according to the Chinese financial publication LatePost.
Huawei
On April 19, Huawei, the world's largest telecom equipment maker (and one battered by U.S. sanctions), signaled its pursuit of the EV market by unveiling an electric car with the HarmonyOS operating system, the Huawei-built OS powering its phones. The vehicle, Arcfox Alpha S, was co-developed by Huawei's driverless car solutions arm and a subsidiary of the state-owned carmaker BAIC Group. Reuters reported in late April that Huawei is also considering taking control of a domestic automaker's EV unit.
360
360, China's largest producer of cybersecurity products, announced on April 26 that it had led a $465.8 million series D round of funding into the EV startup Hozon Auto, which owns the brand Nezha. This move would make 360 the second largest shareholder of the startup. According to the Chinese publication Jiemian, it only took 360 three months to research the market and decide to enter the EV business.
OPPO
OPPO, China's second-biggest smartphone maker by shipments, became the latest internet company to make its foray into the EV market. The company confirmed to Beijing Business News on April 28 that it is investing in the EV business, becoming the third Chinese phone maker to tap into China's burgeoning EV market. Chinese tech publication 36Kr had reported earlier that OPPO's founder Tony Chen was researching the EV market, and other executives were interviewing to fill positions in a new self-driving team.
Correction: An earlier version of this story said that Xiaomi announced its EV subsidiary on March 30; it was announced March 31. This story was updated on May 10, 2021.
