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.
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%.