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Will New Approval Put Baidu Ahead in the Self-Driving Space?
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Baidu, Inc. (BIDU - Free Report) , a Beijing-based internet search company, has finally got the long-awaited go-ahead to conduct open-road tests for its autonomous driving vehicles in designated areas in Beijing.
It makes Baidu the first company to receive licenses for conducting road tests in Beijing. The company can now test its autonomous vehicles on 33 roads, spanning around 105 kilometers (65 miles) in less-populated suburbs.
The latest development could take the company a step ahead in the race to build autonomous cars.
Notably, shares of Baidu have gained 36.2% in the 12-month period, outperforming the industry’s 11.1% rally.
Baidu’s Progress Over These Years
In the past few years, Baiduhas made great progress in the space. The company has a major self-driving project called Apollo. This Apollo platform focuses on utilizing the Chinese tech heavyweight’s strengths in artificial intelligence to build a collaborative driverless car ecosystem. As of now, Apollo has already attracted more than 70 global partners including OEMs, Tier 1 suppliers, developer platforms and technology startups.
Also, Baidu has partnered with many companies to speed up the deployment of connected and autonomous-vehicle technology, for automotive OEMs and suppliers across the world. These partnerships have helped Baidu develop new technologies and strengthen its capabilities in the autonomous vehicle market.
Being the first one to get a permit for on-road testing and its various collaborations over the past few years will definitely give Baidu an upper edge over its competitors.
Also, last year Baidu announced a $1.5 billion autonomous driving fund, with plans to invest in 100 autonomous driving projects over the next three years. The firm hopes to get self-driving cars onto the roads in China by 2019.
Moreover, China’s aim to bolster its position in the global race for autonomous vehicles is helping Baidu fulfill its dreams. Beijing is keen to keep up with global rivals such as Waymo, the self-driving arm of Google parent Alphabet (GOOGL - Free Report) and Tesla.
In this regard, earlier this month China issued licenses to auto makers allowing self-driving vehicles to be road tested in Shanghai.
Baidu’s Vice-President Zhao Cheng said, “With supportive policies, we believe that Beijing will become a rising hub for the autonomous driving industry". "We hope to work with more partners to pave the way for the full development of autonomous driving."
All said and done, it appears that Baidu is making all efforts to come out very strongly in this autonomous driving space that is now evolving at a rapid pace.
What’s Drivng Baidu’s Ambitions?
Self-driving cars are expected to be cheaper owing to the use of electric engines instead of gasoline-powered ones. Moreover, manufacturing costs related to complex dashboard and other sophistications are expected to significantly decline due to the absence of human intervention. Furthermore, self-driving cars are expected to be much safer.
Also, this technology presents significant growth opportunity for automakers. BCG anticipates the autonomous car market to be worth $42 billion and $77 billion by 2025 and 2035, respectively. The research firm forecasts that by 2030, approximately one-tenth of new cars sold globally will be self-driving.
This bodes well for the likes of Baidu.
However, Baidu is not the only one testing the waters with autonomous cars. Alphabet Inc. has been working on an autonomous car project since 2009 and already completed millions of miles on self-driving car testing. General Motors Co. (GM - Free Report) and Ford Motor Co. (F - Free Report) are also trying to enter this segment.
However, the recent death that took away the life of a woman by a self-driving test vehicle from the leading ridesharing company Uber Technologies Inc. has cast a pall on the technology. This incident may put a brake on the development as well as commercialization efforts of self-driving cars, at least in the near term.
Wrapping Up
Undoubtedly the autonomous driving space will witness more innovation over the next few years, both by technology companies and automakers, including smaller startups. According to Research & Markets data, global software market for autonomous cars is anticipated to grow at a CAGR of 76.1% between 2017 and 2021. This is one of the best places to be in because the technology is being developed. Also, early investors can sell their interest at a hefty premium.
It’s not surprising that Baidu wants to make a bigger splash in the self-driving space and turn Apollo into a global initiative. The latest deal for sure will speed up its efforts in this space.
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Image: Bigstock
Will New Approval Put Baidu Ahead in the Self-Driving Space?
Baidu, Inc. (BIDU - Free Report) , a Beijing-based internet search company, has finally got the long-awaited go-ahead to conduct open-road tests for its autonomous driving vehicles in designated areas in Beijing.
It makes Baidu the first company to receive licenses for conducting road tests in Beijing. The company can now test its autonomous vehicles on 33 roads, spanning around 105 kilometers (65 miles) in less-populated suburbs.
The latest development could take the company a step ahead in the race to build autonomous cars.
Notably, shares of Baidu have gained 36.2% in the 12-month period, outperforming the industry’s 11.1% rally.
Baidu’s Progress Over These Years
In the past few years, Baiduhas made great progress in the space. The company has a major self-driving project called Apollo. This Apollo platform focuses on utilizing the Chinese tech heavyweight’s strengths in artificial intelligence to build a collaborative driverless car ecosystem. As of now, Apollo has already attracted more than 70 global partners including OEMs, Tier 1 suppliers, developer platforms and technology startups.
Also, Baidu has partnered with many companies to speed up the deployment of connected and autonomous-vehicle technology, for automotive OEMs and suppliers across the world. These partnerships have helped Baidu develop new technologies and strengthen its capabilities in the autonomous vehicle market.
Being the first one to get a permit for on-road testing and its various collaborations over the past few years will definitely give Baidu an upper edge over its competitors.
Also, last year Baidu announced a $1.5 billion autonomous driving fund, with plans to invest in 100 autonomous driving projects over the next three years. The firm hopes to get self-driving cars onto the roads in China by 2019.
Moreover, China’s aim to bolster its position in the global race for autonomous vehicles is helping Baidu fulfill its dreams. Beijing is keen to keep up with global rivals such as Waymo, the self-driving arm of Google parent Alphabet (GOOGL - Free Report) and Tesla.
In this regard, earlier this month China issued licenses to auto makers allowing self-driving vehicles to be road tested in Shanghai.
Baidu’s Vice-President Zhao Cheng said, “With supportive policies, we believe that Beijing will become a rising hub for the autonomous driving industry". "We hope to work with more partners to pave the way for the full development of autonomous driving."
All said and done, it appears that Baidu is making all efforts to come out very strongly in this autonomous driving space that is now evolving at a rapid pace.
What’s Drivng Baidu’s Ambitions?
Self-driving cars are expected to be cheaper owing to the use of electric engines instead of gasoline-powered ones. Moreover, manufacturing costs related to complex dashboard and other sophistications are expected to significantly decline due to the absence of human intervention. Furthermore, self-driving cars are expected to be much safer.
Also, this technology presents significant growth opportunity for automakers. BCG anticipates the autonomous car market to be worth $42 billion and $77 billion by 2025 and 2035, respectively. The research firm forecasts that by 2030, approximately one-tenth of new cars sold globally will be self-driving.
This bodes well for the likes of Baidu.
However, Baidu is not the only one testing the waters with autonomous cars. Alphabet Inc. has been working on an autonomous car project since 2009 and already completed millions of miles on self-driving car testing. General Motors Co. (GM - Free Report) and Ford Motor Co. (F - Free Report) are also trying to enter this segment.
However, the recent death that took away the life of a woman by a self-driving test vehicle from the leading ridesharing company Uber Technologies Inc. has cast a pall on the technology. This incident may put a brake on the development as well as commercialization efforts of self-driving cars, at least in the near term.
Wrapping Up
Undoubtedly the autonomous driving space will witness more innovation over the next few years, both by technology companies and automakers, including smaller startups. According to Research & Markets data, global software market for autonomous cars is anticipated to grow at a CAGR of 76.1% between 2017 and 2021. This is one of the best places to be in because the technology is being developed. Also, early investors can sell their interest at a hefty premium.
It’s not surprising that Baidu wants to make a bigger splash in the self-driving space and turn Apollo into a global initiative. The latest deal for sure will speed up its efforts in this space.
Baidu, Inc. Price and Consensus
Baidu, Inc. Price and Consensus | Baidu, Inc. Quote
Zacks Rank
Baidu carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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