Tech giants zoom into carmakers' ring as digital era sinks roots deeper
From Huawei to Xiaomi, China's largest technology companies are swarming into the electric car business.
Conviction among them is growing that their tech expertise will prove instrumental in unlocking the vast potential of the e-car sector against a global backdrop of vehicles virtually becoming computers on wheels.
Tech firms' influx into the e-car sector is thus further heating up the already red-hot market where traditional auto giants such as Volkswagen as well as startups such as Tesla and China's Nio are locked in fierce competition.
Globally, e-cars are changing the auto industry that had stayed basically unchanged since German engineer Karl Benz invented the vehicle in 1885.
Now even affordable e-cars can greet the drivers when they get in, take their voice commands and even alert them when they get sleepy.
Many can have their software updated wirelessly, and some e-cars can park themselves when drivers alight and return later to pick them up at a tap on the phone screen.
It is these new features that have enticed the internet and technology companies to jump on the e-car bandwagon in the hope of picking their slice of the pie in return for their expertise in computing abilities, software and content.
"For a good smart car, the hardware is the body and the software is the soul. Without the help of the internet, car manufacturers would still follow traditional ways of thinking by replacing fuel tanks with batteries," said Zhou Hongyi, founder and CEO of Qihoo 360, a Beijing-based company that makes antivirus software.
Zhou made the remarks in May, when Qihoo 360 announced its partnership with Chinese startup Nezha. It would lead Nezha's latest financing round, and become its second-largest shareholder.
"Smart cars are expected to become one of the largest players in the field of smart technology. So network security, as well as the cybersecurity of connected vehicles, will inevitably become an important aspect of 360's future strategy," said Zhou.
The logic is shared by many household product companies jumping on the gold rush of carmaking, and sometimes even personal emulation plays a part as well.
" (Xiaomi CEO) Lei Jun is now 52 years old, one year older than me, and he is having a shot at the electric car industry. So why shan't I?" said Zhou.
Xiaomi, China's largest smartphone maker by shipments, unveiled its carmaking plan in March. Co-founder and CEO Lei called it his final startup project, saying he would lead the standalone division and the first vehicle, which can be a sedan or an SUV, is expected to hit the market in three years.
"From smartphones to smart home appliances, and smart vehicles, we would like to offer our customers better experience enabled by our technology," said Lei.
Baidu is another dotcom firm that will produce electric vehicles. It made public its plan in January, two months earlier than Xiaomi.
The Beijing-based internet giant will build a joint venture with Volvo owner Geely, and the first vehicle will hit the market in three years, followed by new vehicles every 12 to 18 months, said the joint venture's CEO Xia Yiping.
Baidu's decision to build cars was partly because it wants to demonstrate its autonomous driving technology, which it started to develop back in 2013, believing its own vehicles will help convince carmakers to buy its solutions as well as its maps and infotainment content.
"The core value of cars in the future will be how intelligent they are," Xia said. "The earlier a company plans, the more control on self-developed technologies it gains, the more advanced technology it has, the more power it will own in the market."
At this year's Shanghai auto show, held in late April, Baidu was among the 100-plus technology companies that stole the limelight of the biennial event for vehicle makers and car aficionados.
The company said its autonomous driving Apollo system will come preinstalled with at least one mass-produced car model each month in the second half of this year. It expects Apollo's solutions will be preinstalled on 1 million vehicles over the next three to five years.
"Apollo will continue to increase its investment in fields such as autonomous driving and automobile intelligence," said Li Zhenyu, Baidu's senior corporate vice-president.
Also at the Shanghai auto show, the first-ever vehicle featuring Huawei's operating system and autonomous driving solution made its premiere.
A video clip showed that the vehicle can navigate itself through busy urban traffic without a driver. The company said that its vehicles can drive themselves for 1,000 kilometers without human intervention.
"Our goal is to bring digital technology into every car in the world," said Wang Jun, head of Huawei's smart car business unit.