Major partnerships between big tech and automakers have kicked the electric vehicle race into high gear.
This technological convergence across sectors will undoubtedly expedite the production of smart, and eventually autonomous, electric vehicles.
What Happened: Microsoft (NASDAQ:MSFT) and General Motors Co. (NYSE:GM) announced Tuesday a partnership for GM's vehicle start-up Cruise.
Included in this combined $2-billion dollar investment is Honda Motor Co. and a group of institutional investors.
Cruise will use Microsoft's Azure cloud platform in its autonomous vehicles. GM plans to launch a fleet of 30 new electric cars by 2025. GM shares soared 10% on the announcement.
Why It Matters: Fast-paced political policy changes and a growing awareness of climate change has traditional automakers racing to catch up to Tesla (NASDAQ:TSLA) and give consumers more EV options.
Recent Partnerships: On Jan. 10, Baidu Inc. (NASDAQ:BIDU) announced a partnership with Geely Automotive Holdings Ltd. (OTC:GELYF).
The partnership will result in a new company set to produce smart autonomous cars, although its name has yet to be announced. Shares of each company have skyrocketed 90% in the last 10 weeks.
In August, Blackberry Inc. (NYSE:BB) announced a partnership with XPeng Inc. (NYSE:XPEV).
XPeng will use Blackberry's IPU-03 domain controller in the new P7 electric sports sedan, which is available in China.
XPeng shares are up 135% since it went public in September, and Blackberry shares gained new life, with its shares up over 150% since the XPeng partnership announcement.
In November, Alibaba Group Holdings Ltd. (NYSE:BABA) announced a partnership with SAIC Motors.
On Jan. 13, Alibaba increased its involvement and launched a sedan under a new brand, IM, which stands for "intelligence in motion."
Amid uncertainty around potentially being delisted from the New York Stock Exchange after an executive order signed by outgoing President Donald Trump in November, Alibaba share prices decreased 34%. They have since rebounded just under 20% from the recent lows after it was confirmed that Alibaba Group Holdings would remain trading on the NYSE.
What's Next: Rumors have recently been circulating that Apple (NASDAQ:AAPL) and Hyundai Motor Company Ltd. (OTC:HYMTF) plan to announce a partnership to create EVs together. Investors will be anxiously awaiting a formal announcement, which is widely expected for March, with cars available as soon as 2024.
Photo courtesy of XPeng.