General Motors (GM) will invest in Chinese self-driving startup Momenta, as it looks to catch up with Chinese EV startups Nio (NIO) and Xpeng Motors (XPEV) whose “smart” electric cars are resonating with local consumers. GM stock rose.
On Thursday, GM announced a $300 million investment in Momenta, ramping up on next-gen vehicle technologies.
“Customers in China are embracing electrification and advanced self-driving technology faster than anywhere else in the world,” Julian Blissett, president of GM China, said in a news release. In the U.S., General Motors already owns a majority stake in Cruise, a self-driving car company.
GM promised to announce launch timing for self-driving technologies in China “closer to production.”
China’s Nio, Xpeng Boast ‘Smart Car’ Edge
The U.S. auto giant’s acceleration on autonomous driving in China comes as Chinese EV startups continue to see sales of so-called “smart cars” boom this year after a blockbuster 2020.
Those startups, including Nio and Xpeng, tie their success to their electric vehicles’ advanced driver-assist and semi-autonomous features. The vast and fast-growing number of middle-class consumers in one of the world’s biggest EV markets seek “intelligent” vehicles, they say.
More critically, Nio and Xpeng are poised to bring their most technologically advanced electric vehicles yet to market. Set to arrive in early 2022, Nio’s ET7 electric sedan will be its first autonomous driving model, the company says.
And arriving next month, Xpeng’s P5 electric sedan will offer “the strongest advanced driver assistance hardware system to date,” the company says. Both the ET7 and P5 use Lidar, an advanced safety technology that Tesla (TSLA) once rejected.
Chinese internet giant Baidu (BIDU) also has developed a self-driving software and hardware system, called Apollo. It’s looking to sell that autonomous driving system to other automakers. And with looming new EVs such as the EA1, Chinese EV giant BYD (BYDDF) too is ramping up on electric cars with more autonomous driving features.
Meanwhile, GM is also playing catch-up on autonomous driving at home. On Friday, Tesla will release Full Self Driving Beta 10.1, which will be opened up quickly to all beta-test drivers who can show seven days of safe driving, CEO Elon Musk says.
GM Stock Gains
Shares of General Motors rose 2% to 51.58 in Thursday’s stock market. But GM stock remains under the 10-week and 40-week moving averages with no buy point in sight, according to MarketSmith chart analysis.
Among other EV stocks, Nio slipped 0.2%, Xpeng fell 2%, BYD declined 3% and Tesla was flat.
Through 2025, GM is investing $35 billion to develop EV and AV technologies. By 2025, General Motors plans to sell more than a million electric cars around the world each year. By 2035, it plans to only produce electric vehicles.
GM accelerated its EV shift after President Joe Biden early this year signed a series of executive orders pushing a climate-friendly agenda.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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