Chinese automaker Tencent: The invisible giant
Episode nine of a ten-part series with which heise/Autos takes a look at the Chinese car market. There, Chinese electric car manufacturers are warming up – partly with strong support from the so-called Communist Party – in order to soon roll up the domestic and international markets with a lot of momentum and a colorful bouquet of the most modern cars. This should not remain without consequences for the German car manufacturers, whose largest single global market has been China for several years.
On the one hand, this will foreseeably change the picture on German and European roads, but will also have an impact on German producers and their sales in China, the world’s largest single market.
Tencent has become an integral part of everyday Chinese life. And like the other tech giants Baidu and Alibaba, Tencent has set out to get its share of the automotive pie. They are also plunging into the areas of autonomous driving, digitization and artificial intelligence. With Volkswagen, BMW and Mercedes, all three major German manufacturers are dependent on the services of the group.
Many Europeans may not have heard the name Tencent, even though the Chinese tech giant is now the world leader in gaming. The group owns the studios behind hits like Clash of Clans, Fortnite and Gears of War. However, Tencent has its roots in a different industry.
part of everyday life
Tencent was founded in 1998 and immediately launched the QQ messenger. A service for instant messaging. This was later followed by WeChat, which was initially just a Chinese answer to WhatsApp, but quickly grew into much more. In the meantime, the entire everyday life can be regulated via the application. From shopping to booking a doctor’s appointment, everything can be organized.
Tencent has stakes in over 600 companies and uses incredible funds to ensure it gains market share in the automotive industry.
(Image: Tencent)
In addition, Tencent has video and music streaming platforms, a cloud-based video conferencing tool, and serves as a venture capitalist. In total, the group holds stakes in a total of 600 companies. Although share prices are rather volatile, Tencent is considered one of the ten most valuable companies in the world.
Billion law
In 2020, Tencent then announced that the company would invest a total of $70 billion in building its digital infrastructure by 2025. The focus was primarily on cloud computing, artificial intelligence and the Internet of Things. But also about basic things like servers, computers and the 5G network. The fact that all manufacturers of electric cars (including foreign ones) are obliged to pass on the driving data of their cars to the local governments should play a role here. This data has to be transmitted, stored and processed somehow.
This is where WeChat comes into play again. The app is used by a billion people. This means that the growth opportunities for Tencent are rather small. Which is why Tencent transferred the service to the car. The company has developed the virtual assistance system “WeChat talking” or “Xiaowei” for this purpose. On the one hand, it combines all the services that Tencent offers and, on the other hand, it is a voice assistant.
The money comes from the gaming world and a large number of digital services.
(Image: Tencent)
Automobile manufacturers can get Xiaowei in the car and the user can use the WeChat functions by voice command. Developers can also use the platform to offer their own apps, which they can also use to make money. Surprisingly, one of the main target groups is people over 55 years of age. It is the fastest growing target group in China.
Tencent aims high
But Tencent is already planning beyond autonomous cars and fully connected services. For example, the group also has a stake in the Bavarian company Lilium. The company from Wessling (legal seat in Amsterdam) is working on an electric aircraft that will take off and land vertically and be able to transport six people. In China, air taxis are considered a vision of the future to avoid the enormous traffic chaos.
Tencent is also active in the truck sector. Tencent has acquired a stake in Inceptio through its subsidiary G7 (fleet management). The company is building self-driving trucks together with Dongfeng and Sinotruk. The vehicles will be equipped with the usual combination of sensors, cameras and lidars and will be capable of level 3 autonomous driving. By 2024, this technology is expected to be installed in 80,000 vehicles. The company network could thus collect enough data to upgrade the artificial intelligence behind autonomous driving to level 4. The hardware for this is already installed.
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(fpi)
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