Ali Baba (NYSE:BABA) deserves praise for its e-commerce business in China, but now it wants to earn praise as a participant in the electric vehicle market. In fact, Alibaba announced on Wednesday that it is taking steps to become a serious player in EV. How? ‘Or’ What? With a new partnership and a new Alibaba electric car, the company could soon represent the future of the automobile. So what does this mean for the BABA stock?
For those unfamiliar with the latest electric vehicle news, Alibaba said on Wednesday it is partnering with a 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 Alibaba Electric Car and BABA Stock:
- Alibaba on Wednesday unveiled its new all-electric sedan, 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 business on December 25. SAIC is the main shareholder, with a 54% stake.
- The new IM brand stands for Intelligence in Motion – suggesting that Alibaba’s electric car will prioritize artificial intelligence.
- So what should you know about Alibaba electric car?
- For starters, it comes with a battery of Contemporary Amperex technology (CATL), and this battery has a higher density than others in the market.
- It also features chips from Nvidia (NASDAQ:NVDA).
- Alibaba electric car can park, take photos and post on social media.
- Investors should note that the sedan, which is a bit smaller than the Nio (NYSE:NIO) ET7, will be launched in April 2021.
- Additionally, Alibaba plans to launch an all-electric SUV as part of the joint venture.
The Alibaba electric car and the BABA stock
So why is Alibaba electric car important to BABA stock? And how should investors even view Alibaba’s shares given the U.S.-China tensions and rumors surrounding founder Jack Ma?
For starters, it’s important for investors to consider the scale of the electric vehicle market in China. Alibaba recognizes this, as do many investors. Think about the hype surrounding Nio and how Alibaba is a Xpeng (NYSE:XPEV) funder. With that in mind, it makes sense that Alibaba wants to increase its EV footprint. Additionally, the Chinese government is pushing for greater adoption of EVs. By 2025, Beijing officials want electric cars to account for 20% of total sales.
Finally, Alibaba’s image may not be so bleak. Although Ma is out of the spotlight, CNBC recently confirmed that the founder is not absent. And things seem clearer on the US-China front. As of today, President Donald Trump has stepped back from Alibaba and peers’ delisting plans Tencent (OTCMKTS:TCEHY) and Baidu (NASDAQ:START).
With all of that in mind, Alibaba’s electric car is an intriguing catalyst for BABA’s stock. Make sure to keep these latest EV news on your radar.
As of the publication date, Sarah Smith does not hold (neither directly nor indirectly) any positions in any of the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.