Baidu Inc (ADR) (NASDAQ:BIDU) has made an investment of approximately $100 million in NextEV, a Chinese firm that makes upmarket electric cars. Neither Baidu nor NextEV could confirm the figure even as some media reports in China said the search firm had invested $600 million.The development comes as the Chinese online search giant seeks to expand its revenue streams beyond search advertising and into areas such as autonomous cars and artificial intelligence.
Last year in October the search engine giant launched Baidu Capital, a $3 billion investment fund started with the aim of expanding the company into other internet-based ventures. The investment in the upmarket electric carmaker was the initial one by the fund.
“Baidu Group is very supportive of this investment and look forward to future business co-operation with NextEV,” Baidu said in a statement after the investment became public.
Flashy car maker
In an electric vehicle sector that is highly fragmented, NextEV has emerged as one of the flashiest in China. The firm is the manufacturer behind the NIO EP9, the one of the fastest cars in the all-electric racing vehicles category. Some of the backers of the electric car maker includes Hillhouse Capital and Tencent Holdings. The company had set a target of raising $3 billion by the close of 2016 from both domestic and international sources.Last year in October, the company chose Silicon Valley as its headquarters in the United States. A former Cisco senior executive, Padmasree Warrior, was appointed to as the head.
Like other electric carmakers in China, NextEV has enjoyed subsidies from the government that have been shelled out in order to promote the green car industry. The billions of dollars in subsidies have led to many electric car startups springing up and the grip is now being tightened by the government in order to cull the weak ones.
Baidu’s investment in NextEV will not be the first time the search giant will be putting money in unmanned vehicles. There have been mixed results though. A collaboration with BMW to come up with a self-driving car prototype, for instance, got cancelled last year.
On Friday shares of Baidu Inc edged up by 0.03% to close the day at $176.62 a share.