Nio: collaboration with tech giants – that’s the goal

Nio: collaboration with tech giants - that's the goal

Chinese electric car startup Nio is already well ahead of most of the competition in terms of information and software. Nevertheless, the carmaker is now collaborating with tech giant Tencent. Chinese video game and technology conglomerate Neo is said to be leading the way in autonomous driving.

Both the companies announced this on Monday. In particular, Tencent supports carmakers with the high-precision HD maps needed for automated driving. In addition, Nio will use the tech group’s cloud services to store and process the vast amounts of data needed to train autonomous driving. A similar partnership was struck by Nio competitor XPeng with Alibaba in August for this purpose.

Given that Tencent already has a large stake in Nio, the choice of partner makes perfect sense. While Tencent may benefit from China’s support for new energy vehicles, Nio gets technical support from one of China’s biggest companies. Also, the collaboration could help the carmaker save costs and reduce mounting losses.

With the collaboration, Nio can further expand the benefits of vehicle software and thus compete with established car manufacturers. NIO is confident with powerful vehicles and other models in the pipeline. The company is interesting. The stock seems to have recovered momentum after the massive selloff and has gained significantly since Monday. Nonetheless, Chinese equities remain risky and increased volatility can be expected. An investment therefore only suitable for risk-averse investors.

Note: Trading in shares of Chinese companies is associated with significant political and legal uncertainties. The risk of total loss for investors has increased. DER AKTIONĂ„R recommends investing in China shares only in individual cases and with a low weighting.

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