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The partnership announced by Tencent and Geely is expected to be mutually beneficial.
Tech company Tencent Holdings (OTCMKTS: TCEHY) has teamed up with car manufacturer Geely Automobile Holdings Ltd (HKG: 0175) to work on driverless and smart car technology. The Chinese companies will be exploring “digitalisation, intelligent cockpits, autonomous drive, and low carbon development.”
This is the latest in a series of collaborations between conventional car manufacturers and tech companies.
Tencent is known for its work in entertainment, social media, gaming and artificial intelligence. The companies work on AI and cloud-computing it well-suited for the increasingly tech-centric auto sector.
Part of a statement issued by Geely reads:
“Tencent will help Geely complete the digital upgrade of the “full user life cycle” and build a “people-centric” digital service system. At the same time, the two parties will jointly promote the low-carbon development of the entire automotive industry chain, explore the joint construction of a “carbon neutral” open platform, work together to enhance the corporate ESG governance level, and explore long-term sustainable development.”
Geely is China’s largest privately-owned vehicle manufacturer. The company recently partnered with Baidu to create an electric vehicle company. Terms of the agreement were that Geely would be in charge of production and the search engine company would take on the technical part by developing software to be integrated into the vehicles. This partnership is mutually beneficial.
This is seen in the spike of over 13% in Geely shares on the Hong Kong stock exchange after the announcement. It was also one in a series of steps Baidu is making to diversify its income. These include Apollo, a driverless car software that is currently being tested in robot axis, DuerOS, a voice assistant and a map application.
Another partnership was with iPhone supplier Foxconn to manufacture vehicles and offer consulting, AI-based driving systems and other services to automotive companies worldwide.
There is increasing competition in the smart-vehicle industry. More so in China, which is now the largest auto market globally.