BAT is driving the autonomous vehicle trend in China
It’s official – all three of China’s vaunted “BAT” stocks (Baidu, Alibaba, and Tencent) are now in the autonomous driving market. BAT is the equivalent of the western acronym FANG (Facebook, Amazon, Netflix and Google) – the country’s “big tech” operative, when taken together. News broke this week that Alibaba, the undisputed king of Ecommerce in that hemisphere of the world, was adding its name into the mix. For their parts, Baidu and Tencent have had interests in the industry for while now.
For the last 12 months, BAT has been an enormous growth engine
SOURCE: Yahoo Finance
Speaking to Chinese business and finance publication Caixin, an Alibaba spokeswoman said that the company was looking to hire a further 50 self-driving specialists to staff its AI research lab. According to anonymous reports, the company is already running regular road tests of self-driving vehicles, and has the capability for open road trials. The South China Morning Post says that Alibaba will pursue level 4 autonomous capability “which means cars can self-drive in most conditions without human intervention.”
For reference sake, level 4 is the category of self-driving capability that ALibaba’s fellow BAT member, Baidu, is currently chasing. Last November, Baidu was identified as a “National Champion in self-driving cars” by China’s Ministry of Science and Technology – so that shows how high Alibaba is aiming with its new venture.
Autonomous vehicles are poised to have a massive impact in China, where they are already vastly more popular than in other countries. According to global research firm McKinsey, 98% of Chinese interviewed in recent survey are positive about the tech, as opposed to 69% in Germany and 70% in the U.S. Chinese consumers are also, according to the same report, willing to pay a premium for the vehicles.
Christopher Thomas, a McKinsey partner, spoke to the South China Morning Post, saying: “It’s still too early to tell who will be the winners in the trillion yuan market. No one company will have all the pieces to deliver the solution.”
Dominion holds all three BAT stocks in its Global Trends Ecommerce Fund.
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