Chinese electric vehicle maker Nio and tech giant Tencent have agreed to work in collaboration on areas including autonomous driving and high-definition mapping.
Tencent is a gaming, social media, and cloud computing titan while Nio is Tesla’s direct competitor in China. They both will now be working together to capitalize on Beijing’s focus on so-called new energy cars.
The partnership could allow Tencent to do this, while also giving Nio the technology backing of one of China’s biggest firms. Tencent is already a major investor in Nio, which is striving to differentiate itself from a sea of electric car start-ups.
This collaboration was preceded by the e-commerce firm Alibaba and Nio’s rival Xpeng opening up a computer server to train software for driverless cars in August.
Nio and Tencent will work together on high-precision mapping systems for drivers. Nio will also be using Tencent’s cloud computing infrastructure for data storage and training for autonomous driving. Driverless cars require huge amounts of real-time data to be processed so the algorithms can be successfully trained.
Tencent’s partnership with Nio gives the company another opportunity to dive into new markets as its core video gaming business is constantly facing hiccups due to austere domestic regulations.
Nio is facing its own challenges, including widening losses and pressure on margins from higher material costs and supply chain issues.
Nevertheless, the company delivered 31,607 vehicles in the third quarter, marking a quarterly delivery record for the start-up.
However, China’s once high-flying EV start-ups have gone downhill in performance as the investors turned away from growth stocks and China’s economy faced several problems.