Alibaba (NYSE:NANNY) is praised for its Chinese e-commerce business, but now wants to be praised as a player in the electric vehicle market. In fact, Alibaba announced on Wednesday that it was taking steps to become a serious EV player. How? With a new partnership and a new Alibaba electric car, the company will soon be able to represent the future of automobiles. So, what does this mean for BABA’s shares?
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For those unfamiliar with the latest EV news, Alibaba announced on Wednesday that it was partnering with the state-owned company SAIC Engine. The result of the latest venture is an Alibaba electric car and a new brand, IM.
With that in mind, here’s what you need to know now about the Alibaba electric car and BABA stock:
- Alibaba unveiled its new all-electric sedan on Wednesday as part of the IM brand.
- Investors should note that the IM brand is part of a joint venture.
- This joint venture includes Alibaba, SAIC Motor and Shanghai Zhangjiang Hi-Tech Park Development.
- These three companies officially launched the venture on December 25. SAIC is the largest shareholder, with a 54% stake.
- The new IM brand stands for Intelligence in Motion – suggesting that the Alibaba electric car will prioritize artificial intelligence.
- So, what do you need to know about the real Alibaba electric car?
- For starters, it comes with a battery of Contemporary Amperex Technology (CATL), and this battery is of higher density than others on the market.
- It also has chips from Nvidia (NASDAQ:NVDA)
- The Alibaba electric car can park alone, take pictures and post on social networks.
- Investors should note that the sedan, which is slightly smaller than the Nio (NYSE:NIO) ET7, will be launched in April 2021.
- In addition, Alibaba plans to launch a fully electric SUV as part of the joint venture.
The Alibaba electric car and the BABA stock
So why is the Alibaba electric car important to BABA’s shares? And how should investors view Alibaba’s shares, given the US-China tensions and rumors surrounding founder Jack Ma?
To begin with, it is important for investors to consider the magnitude of the EV market in China. Alibaba recognizes this, as do many investors. Think about the enthusiasm around Nio and the fact that Alibaba is an important Xpeng (NYSE:XPEV) supporter. With that in mind, it makes sense that Alibaba wants to increase its EV footprint. In addition, the Chinese government is pushing for greater EV adoption. In 2025, officials in Beijing want electric cars to account for 20% of total sales.
Finally, Alibaba’s image may not be as bleak. Although Ma is out of the spotlight, CNBC recently confirmed that the founder is not missing. And things look brighter on the US-China front. As of today, President Donald Trump has given up on plans to remove Alibaba and his peers Tencent (OTCMKTS:TCEHY) and Baidu (NASDAQ:BIDU)
With all this in mind, the Alibaba electric car is an intriguing catalyst for BABA’s actions. Make sure you keep the latest EV news on your radar.
As of the date of publication, Sarah Smith did not (directly or indirectly) hold any positions in the securities mentioned in this article.
Sarah Smith is a producer of web content at InvestorPlace.com.