Baidu Looking to Make a Splash in the Self-Driving Car Market
Bloomberg reported on Monday that Baidu Inc. (ADR)(NASDAQ:BIDU) plans to take the self-driving car segment by storm, using its superior artificial intelligence (AI). Driverless cars have become a topic of discussion in the last few years with a few prominent global giants such as Google and Tesla actively engaged in their testing, research, and development.
The mastermind of this drive by China’s tech giant is Baidy Vice President Wang Jing, who aims to push the mainland into a leading position for the upcoming and inevitable age of driverless cars. However, the Chinese tech giant’s quest for global domination has some serious challenges in the form of dominant and established global setups.
Google is one of the major giants in the self-driving vehicles market and has already tested said vehicles for upwards of 2 million miles. The US tech titan’s level of interest in the driverless vehicle market can be judged by its ambitions to establish an independent business arm under alphabet Inc.’s corporate umbrella in the coming months. Another prominent company is Tesla that plans to integrate the driverless technology in to its Electric Vehicles (EV).
However, Mr. Jing is not perturbed by the crowded and heavyweight companies bearing driverless cars market, as he reckons that when it comes to making intelligent autonomous vehicles, China is not too far behind the US. He believes that as opposed to the conventional car manufacturing, which reached China a century later but would be its forte because of the AI this country is an expert in. Mr. Wang thinks that with the self-driving vehicles, the core technology will shift towards AI rather than gearbox, indicating a quicker and solid adaptation for Baidu.
Recently, Baidu is adamantly emphasizing on AI. Baidu founder Robin Li has invested heavily into this devision. This technology is aimed at enhancing the quality of search results and in conformity with the tasks performed by computers to align with the human brain. The company acquired the services of a famous computer tech genius and an adept professional in robotics Andrew Ng and appointed him as Baidu’s chief scientist in May 2014.
The China’s search giant is confident that its advanced AI, mapping, and Internet connectivity are going to propel it in the right direction in terms of solidly entering the driverless car market. Chinese tech companies are also buoyed by President Xi Jinping’s tech initiative, which encourages the sector to enhance innovation to become prominent at a global level. Mr. Jinping paid a visit to Baidu’s stall at a global Internet forum in December 2015, where he keenly lent an ear to Baidu CEO’s plans to manufacture driverless cars.
Market analysts, however, are not certain about the sudden influence of the Chinese companies on the global driverless vehicles market. Cao He, analyst at the Minzu Securities in Beijing reckons that due to the diverse nature of roads in different locations, it is going to be hard for companies to come up with a solid plan in the next five years at the very least. He believes that Baidu’s ambition for global self-driving car market domination might be farther than the company excitedly aims for.
China Business News believes that Baidu has got the financial pedigree with a strong market capitalization of 59.16 Billion to confidently enter and compete in the so-called holy trinity of automobile industry’s future: electric vehicles, car-pooling, and self-driving cars.
According to Dunne Automotive Ltd. President Michael Dunne in Hong Kong, despite Google has got a massive head start over other aspirants of the driverless car market, the will of Chinese competitors to succeed cannot simply be overlooked. Baidu has seen a constant surge in revenue in the last five years. This has put the company in a strong position to look into diversification especially those in close conformity with tech setups like the driverless car market.
According to Boston Consulting Group (BCG), 2017 is the year to have cars able to autopilot in traffic jams and self-valet park. It believes that highway autopilot is likely to hit the roads in 2018 followed by urban-autopilot capable vehicles in 2022. This would help ease the integration of driverless vehicles in to the conventional cars with an eye on fully-autonomous vehicles by 2025.
CBN reckons that a major advantage that Baidu will exercise by introducing driverless cars in China would be the superior knowledge of the local roads as compared to Google and other automakers. Mr. Jing also believes that the robotic cars trained to drive on Chinese crossroads and bumpy roads in different vicinities would give Baidu a certain competitive edge over Google. He thinks that in comparison to a self-driving car trained on the US roads, the cars trained to autonomously drive on Chinese roads would do much better.
Baidu is fully engaged in the idea of introducing driverless cars in China within the next three years in at least 10 major cities of the country. The company is set to let people try out its model driverless vehicles at a conference later this year in a confined environment. The company has been in constant contact with BYD Co. for the last three months to incorporate the Baidu AutoBrain system in the electric cars of BYD. This software would enable BYD’s electric cars to autonomously observe, drive, and make decisions in different situations.
Mr. Jing has singled out Baidu’s AutoBrain system as the fundamental factor behind Baidu’s push for the self-driving technologies. The AutoBrain system is a by-product of its own research and tech experiments and is highly-automated and accurate in recording 3D road data for mapping roads. The system also boasts object recognition and environment awareness technology that helps the vehicles in detecting and following other cars with unmatchable accuracy while maneuvering in high-speed and changing lanes.
Mr. Jing reckons that the day might not be far when people might see Baidu’s owned self-driving cars on the roads. He thinks that it is highly probable that the company becomes a mega supplier of its AutoBrain system to carmakers. He says that there might be challenges in the market, however he believes that there is no turning back from the inevitable transformation of the auto industry to the driverless cars technology.
CBN reckons that the Chinese market for car sales, buses, taxis and other means of transport is gigantic and stands at more than $1.5 trillion per year in terms of revenue. If Baidu was to successfully launch and integrate its self-driving car technology in the Chinese market, it could get a huge shot in the arm in its future ambitions for global and Chinese domination.
We believe that with the Chinese economic slowdown impacting companies locally and internationally alike, Baidu and other companies are in a dire need for diversification in to high-return projects. Especially with the competition intensifying in the Chinese e-commerce industry, the companies need to look for innovation to survive and thrive. CBN opines that the self-driving cars could be the next big thing for Baidu and launch it to the summit of the Chinese internet and technology industry.