Baidu (NASDAQ:BIDU) hasn't been shy about ripping pages out of Google parent Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) playbook, and one of those initiatives happens to be the push for self-driving cars.
Baidu has hit an important milestone in the quest for fully autonomous vehicles, announcing this morning that a modified BMW running Baidu software completed a nearly 19-mile test drive route in Beijing. The car was able to drive in mixed road conditions, doing things that included making turns, changing lanes, merging with incoming traffic as well as exiting the highway on an off-ramp. The fully autonomous vehicle was even able to negotiate U-turns.
This is a pretty big deal. Alphabet's been deploying camera-mounted self-driving cars to snap Google Maps snapshots for years, and even Elon Musk rolled out a software update featuring hands-free highway driving.
It remains to be seen where Baidu's self-driving car will stack up against the competition, but you have to like the odds. Baidu's toiling away in the world's most populous country, and its market leadership position in technology will make it easier to stand out.
China isn't going to be offering chunky subsidies for self-driving cars the way it does for plug-in electric vehicles. The country already has a notorious smog problem in its largest cities. However, there certainly comes a point where consumer safety warrants the active promotion of a disruptive niche.
It also bears pointing out that less than a quarter of the country is currently driving. It's a matter of financial means and not ability, of course, but the possibility of fully autonomous vehicles going mainstream in the future could mean that many in China won't have to learn to drive at all. It could be just like the mobile computing revolution where China consumers bypassed the PC's evolution in time to hop on the smartphone revolution.
It's not just better cars on Baidu's wish list for high-tech transportation options. It turned heads late last year when it announced the development of DuBike last year, a smart bike that provides real-time navigation and anti-theft protection while also doubling as a fitness tracker and health monitor.
Why are Baidu and Google so bent on making self-driving cars a reality? Both search darlings run popular roadmap platforms, and obviously autonomous vehicles would feast on Google Maps and Baidu Map. Cars that drive themselves would also give drivers -- or let's just say the folks sitting in the driver seat -- more time to consume online content and advertising. Just think of the possibilities of what the world's two most prominent search giants could do with local advertising once they pair up your whereabouts with area merchants in an environment where someone can afford to be distracted.
We are still far away from the point in time where any of this is feasible for the masses, and Baidu has only been working on self-driving cars for two years. Thankfully for investors and drivers, it has proven to be a quick learner in the past.