The chief executive officer of an electric car joint venture between China’s largest search engine Baidu (NYSE: BIDU; HKEX 09888), and Geely Automobile (OTC: GELYF; HKEX: 00175) said that it will pour 50 billion yuan ($7.7 billion) into smart vehicle production.
Xia Yiping, who co-founded Mobike, told Reuters today that the funding would come from other investors and Baidu over the next five years. The JV, known as Jidu Auto, plans on debuting its first electric vehicle in three years.
The first car, which looks like a “robot,” would target younger consumers, according to Yiping. At first, Jidu plans to sell to customers directly, rather than using dealerships.
Following the launch of the first model, Jidu intends on debuting a new one every 12 months or a year and a half, according to the report. In the next two or three years, Jidu plans on hiring between 2,500 to 3,000 individuals. That will include up to 500 software engineers.
After the news, U.S. stocks in Geely and Baidu traded 1% and 2% higher intraday Friday.
The EV partnership between Geely and Baidu was first announced in January. Under the deal, Baidu will provide the technology, or the software that powers the EV, while Geely will contribute to designing and manufacturing the car. The ownership structure is currently set up with Baidu holding a 55% stake in the JV, while Geely owns the rest. In the third quarter, the two parties plan on unveiling their branding.
Also In the vehicle space, Baidu became the first Chinese company to secure a permit in both California and China to test driverless vehicles without a safety driver behind the wheel on public roads.
Meanwhile, the stock in Baidu has dropped by more than $100 per share since late February amid Beijing’s fierce antitrust crackdown and growth stocks slumping on fears of rising interest rates.