Vehicle manufacturers are increasingly open to collaboration with rivals and technology companies as they begin to seriously face the enormous challenge of setting aside the internal combustion engine to deal with the climate crisis. The investment needed to develop electric cars has helped spark a wave of collaborations as companies come together to share costs.
The Baidu car company will focus on passenger vehicles and operate as an independent subsidiary, according to its statement on Monday. Baidu will also use its artificial intelligence capabilities and mapping systems.
Geely, which owns Volvo, said in a statement that the company has tried to transform itself from a car manufacturer into a “technology company” focused on “smart electric transport.”
No further details have been released about the association.
Geely shares hit a record high on Monday before closing 2.6%. Shares soared about 20% on Friday, its best day since November 2008, after Reuters reported that the company would team up with Baidu.
Shares of Baidu closed higher last Friday on Wall Street, up 16%, to $ 240.25.
Jill Disis contributed to this report.