BEIJING -- Baidu Inc. plans to form a company to make smart electric vehicles, two sources familiar with the matter said, with manufacturing to be carried out at plants owned by automaker Geely.
Baidu, the leading search engine company in China, will take a majority stake and absolute voting power in the new company.
The venture will revamp some of Geely's existing automobile manufacturing facilities to make the vehicles, with in-car software input from Baidu and engineering from Geely, sources told Reuters.
The companies are in talks to use Geely's EV-focused platform, Sustainable Experience Architecture, for future product development, said one of the sources, who declined to be identified as the plan was private.
Baidu, which is developing autonomous driving technology and internet connectivity infrastructure, did not immediately respond to a request for comment. Geely declined to comment.
Baidu's Nasdaq-listed shares jumped more than 4 percent after Reuters reported the plan.
Reuters had already reported last month that Baidu was contemplating making its own EVs and had held talks with Geely, Guangzhou Automobile Group and China FAW Group's Hongqi on a possible venture.
Baidu's rival Alibaba has formed an EV joint venture with China's biggest automaker, SAIC Motor Corp., while China's Didi Chuxing is making EVs designed for ride hailing services with BYD.
Cheered by Tesla Inc.'s success in commercialization of EVs, internet giants including Tencent Holdings, Amazon Inc. and Alphabet Inc., have also developed auto-related technology or invested in smart-car startups.
People familiar with the matter said last month that Apple is pushing to design an EV and batteries, aiming at a possible 2024 launch.
Hangzhou-based Geely, China's highest-profile automaker due to group investments in Volvo Cars, Daimler and Malaysia's Proton, is expanding EV production. Its main listed company, Geely Automobile, aims to sell 1.53 million vehicles this year.