Baidu Inc. (NASDAQ:BIDU) shares have traded mostly higher since the middle of December following multiple reports that the Chinese tech giant is planning to come up with its electric vehicles (EVs). It has reportedly discussed the possibilities with several automakers. The talks focused on different options including contract manufacturing and the creation of a joint venture for building its EVs.
The Chinese search-engine behemoth has reached automakers including China FAW Group, Zhejiang Geely Holding Group, and Guangzhou Automobile, among others.
This is not the first time that Bidu is trying to benefit from the lucrative automotive market. Back in 2017, it built an autonomous driving unit named Apollo, which mainly delivers AI-powered technology to automakers. It also runs an autonomous taxi service called “Go Robotaxi” with drivers onboard for safety purposes. The service is currently available in three cities including Beijing. However, the company plans to expand it to 30 more cities by 2023.
Baidu’s latest plans to enter the booming EV market also comes at a time when several countries around the world are pushing automakers to adopt cleaner energy sources. The push is expected to create a massive demand for EVs in the coming years. The global EV market is expected to surpass $800 billion by 2027, according to an estimate.
EV manufacturers are already benefitting from the trend. For instance, Tesla (TSLA) shares have skyrocketed more than 720 percent in 2020, while Chinese EV maker Nio Inc (NIO) stock climbed nearly 1100 percent. The tremendous growth enjoyed by the EV stocks this year is another reason why Baidu is planning to grab a chunk of the EV market. Besides, it will create a new revenue source for the company, which currently depends on its search engine business.
Baidu stock hit a new 52-week high of $220.60 on Wednesday. The stock traded on a massive volume of about 25 million shares, as compared to the daily average volume of about 5 million shares.