Please ensure Javascript is enabled for purposes of website accessibility

Baidu Rockets Higher on Electric Vehicle Plans

By Danny Vena – Updated Dec 15, 2020 at 8:58AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese search leader is considering a move into the hot and growing EV market.

Shares of Baidu (BIDU 3.55%) surged higher today on rumors that the company is considering entering the electric vehicle (EV) market, according to a report by Reuters. Baidu, which is widely considered to be China's leader in artificial intelligence (AI) and self-driving cars, has reportedly engaged in discussions with automakers about its plans.

Baidu hasn't yet finalized any deals, which could include a majority-owned collaboration with some of the country's leading carmakers or contract manufacturing of EVs. The company has held early talks with a number of Chinese automakers, including Zhejiang Geely Holding Group, Guangzhou Automobile, and China FAW Group.

Baidu Apollo Go Robotaxi driving on the street in Cangzhou, China.

Baidu's Apollo Go Robotaxi in Cangzhou, China. Image source: Baidu.

The company's Apollo autonomous-driving business already operates a self-driving taxi service, Go Robotaxi, in the cities of Beijing, Cangzhou, and Changsha. Those vehicles currently drive the roads with backup drivers, but Baidu received approval from the Chinese government last week to conduct safety tests with five vehicles operating without human drivers on board. The company plans to expand to as many as 30 cities over the coming three years.

Baidu is already working with a growing list of Western manufacturers on smart-car technology, including Ford, Volkswagen, and Toyota, among others.

EV stocks have been on fire this year, as adoption of EVs accelerates. Market leader Tesla has gained more than 660% in 2020 and the company is set to join the ranks of the S&P 500. At the same time, Chinese EV maker NIO Limited is up nearly 1,000%.

Danny Vena owns shares of Baidu and Tesla. The Motley Fool owns shares of and recommends Baidu and Tesla. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.