Chinese electric car startup Nio is way ahead of most of its competitors in terms of information and software. However, the automaker is now entering into a collaboration with tech giant Tencent. The Chinese technology and video game conglomerate is said to be pushing Nio forward in autonomous driving.
The two companies announced this on Monday. Specifically, Tencent supports the automaker with the high-resolution HD maps required for automated driving. In addition, Nio will use the technology group’s cloud services to store and process the massive amount of data needed for self-driving training. A similar partnership for this purpose was also entered into by Nio XPeng’s competitor with Alibaba in August.
The choice of partner makes perfect sense since Tencent already owns a significant stake in Nio. While Tencent can benefit from China’s NEV subsidies, Nio gets technology support from one of the largest Chinese companies. In addition, cooperation can help the automaker to save costs and reduce increased losses.
By cooperating, Nio can expand the advantages of the vehicle software and thus compete with the well-established vehicle manufacturers. Nio convinces with the powerful cars and other models in the pipeline. The company is interesting. The stock seems to have bounced back after the sell-off and managed to rise significantly since Monday. However, Chinese stocks are still very risky and volatility is expected to increase. Therefore, the investment is suitable only for investors willing to take risks.
Note: Stock trading in Chinese companies is associated with significant political and legal uncertainties. There is an increased risk of total loss for the investors. DER AKTIONÄR recommends investing in Chinese stocks only in individual cases and with a low weight.
