Chinese automaker Tencent: The invisible giant

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(Hier finden Sie die deutsche Version des Beitrags)

Episode nine of a ten-part series in which heise/Autos looks at the Chinese car market. There, Chinese electric car producers - some of them strongly supported by the so-called Communist Party - are just warming up in order to soon roll up the domestic and international markets with a lot of momentum and a colorful bouquet of state-of-the-art cars. This is likely to have consequences for 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 it will also have repercussions for German producers and their sales in China, the world's largest single market.

It's hard to imagine life in China without Tencent. And like the other tech giants Baidu and Alibaba, Tencent has also set its sights on getting its slice of the automotive pie. In doing so, they are also rushing into the areas of autonomous driving, digitization and artificial intelligence. With Volkswagen, BMW and Mercedes, all three major German manufacturers are dependent on the group's services.

Many Europeans may not have heard of the name Tencent, even though the Chinese tech giant is now the global market leader in gaming. Among other things, 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 QQ Messenger. A service for instant messaging. Later, WeChat followed, which was initially only a Chinese answer to WhatsApp, but rapidly developed into much more. In the meantime, the entire daily routine can be managed via the application. From shopping to booking a doctor's appointment, everything can be organized.

Tencent also has video and music streaming platforms, a cloud-based tool for video conferencing, and serves as a venture capitalist. In total, the group has stakes in 600 companies. Although share prices are rather volatile, Tencent is considered one of the ten most valuable companies in the world.

Billion bet

Then, in 2020, Tencent announced that it would invest a total of $70 billion in building digital infrastructure by 2025. This primarily involved cloud computing, artificial intelligence and the Internet of Things. But also basic things like servers, computers and the 5G network. The fact that all electric car manufacturers (including foreign ones) are required to share their cars' driving data with local governments is likely to 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 one billion people. This means that the growth opportunities for Tencent are rather small. Which is why Tencent has transferred the service to the car. For this, the company has developed the virtual assistance system "WeChat italking" or "Xiaowei". On the one hand, it links all the services Tencent offers in this way, and on the other, it is a voice assistant.

Car manufacturers can get Xiaowei into the car and the user can use the WeChat functions via voice command. Developers can also use the platform to offer their own apps, with which they can also earn money. One of the main target groups is surprisingly people above the age of 55. It is the fastest growing target group in China.

Tencent wants to fly high

But Tencent is already planning beyond autonomous cars and fully connected services. The group also has a stake in Bavarian company Lilium, for example. The company from Weßling (legal domicile in Amsterdam) is working on an electric flying vehicle that will be able to take off and land vertically while transporting six people. In China, air cabs are seen as a vision of the future to avoid the enormous traffic chaos.

Tencent is also active in the truck sector. Through its subsidiary G7 (fleet management), Tencent has acquired a stake in Inceptio. 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. This would allow the company's network to collect enough data to upgrade the artificial intelligence behind autonomous driving to level 4. The hardware for this is already installed.

(fpi)