Chinese gaming, social media and cloud computing giant Tencent has signed a cooperation agreement with Nio, one of Tesla's competitors in China.
The partnership will allow Tencent to take advantage of Beijing's focus on so-called new energy vehicles, while also giving Niu technology support to one of the largest companies in China.
Tencent is already a major investor in Niu, which is striving to differentiate itself from emerging electric car companies.
The agreement comes after e-commerce site Alibaba and automaker Xpeng partnered with Nio to open a computing center to train self-driving car software in August 2022.
Niu and Tencent said on Monday that they will work together on high-precision mapping systems for drivers. Niu will also use Tencent's cloud computing infrastructure for data storage and self-driving training.
Self-driving cars require huge amounts of data to be processed in order to train the algorithms.
Tencent is the second largest digital giant in China
Tencent is the second largest digital giant in China (Reuters)
Tencent's partnership with Niu gives the company another opportunity to enter new business areas as the video game business - Tencent's core business that has been hit by strict local regulations - is still facing bad days.
Meanwhile, Niu faces challenges, including mounting losses, rising material costs and supply chain issues.
However, the company delivered 31,607 vehicles in the third quarter, setting a record for quarterly delivery numbers.
However, China's emerging electric car companies - which were once high-flying - have seen their share prices decline this year, as investors have turned away from them and the Chinese economy has faced a slew of problems.
