Tesla‘s Chinese rival NIO and technology juggernaut Tencent has partnered on projects involving high-definition mapping and autonomous driving, as per CNBC. Specifically, NIO will train for autonomous driving and store data on Tencent’s cloud computing system.
That said, a strategic cooperation agreement has been reached between Tencent and NIO as they seek to capitalize on Beijing’s focus on new energy vehicles.
The partnership
Through the partnership, Tencent may profit from Beijing’s emphasis on NEVs. On the other hand, NIO will benefit from the technological support of a major Chinese company.
It is worth noting that NIO has been attempting to stand out from the multitude of electric vehicle start-ups. It was able to advance in the market through significant investments from major companies, which Tencent was already among them.
Furthermore, this partnership will enable Tencent to expand its business operation. The tech giant needs this advantage because domestic regulation is still hurting its key video game business.
While everything is going on, Nio is dealing with growing losses, pressure on margins due to rising material costs, and supply chain troubles.
Nevertheless, the third quarter saw a record-setting 31,607 NIO vehicle deliveries. That said, the joint forces of the two Chinese companies have a high potential to boost each other’s market presence as they recover from their losses.
