Chinese search engine giant Baidu is jumping into the electric hypercar race after investing about $600 million in NextEV.
Shanghai-based NextEV has been seeking capital to roll out its Tesla-competitive NIO brand. The startup hosted a splashy launch event at Saatchi Gallery in London in November, dazzling attendees with the NIO EP9.
NextEV is calling it the “world’s fastest electric car” – and last year earned a Nürburgring lap just eight seconds behind a Porsche 918 Spyder. With its 1,341-horsepower motor, the NIO EP9 is bound to get attention when it rolls out on the market.
Baidu has been looking for opportunities outside its search and advertising business with China-based rivals such as Alibaba. “New energy vehicle” subsidies in China and increasing competition for that EV market have captured Baidu’s attention.
Autonomous cars is another point of interest, and one that Baidu is likely to tap into through the NextEV alliance. Last year, Baidu was granted approval by California’s Department of Motor Vehicles to test out its autonomous vehicles. The Chinese conglomerate had established Baidu USA overseas, with self-driving cars part of its business plan.
NextEV has a substantial presence in testing the new technology. That company also gained approval to test self-driving cars in California, and has an office in San Jose with about 250 employees.
The electric car startup has other major investors, including tech giant Tencent Holdings and Hillhouse Capital and now new investment comes though Baidu Capital. That subsidiary has a 20 billion yuan ($3 billion) investment fund the parent company set up late last year.
The two companies will need to keep in mind that the Chinese government is showing signs of backing off new energy vehicle consumer rebates and manufacturer subsidies. Declining EV sales in the market this year were thought to be caused in part by government funding cuts.