Baidu is considering designing and building electric vehicles

China’s Baidu is considering making its own electric vehicles and has held talks with automakers about the possibility, three people with knowledge of the matter said, the latest move in a race among tech firms to develop smart cars.

The search-engine leader, which also develops autonomous driving technology and internet connectivity infrastructure, is considering contract manufacturing, one of the people said, or creating a majority-owned venture with automakers.

The initiative would be a step up from internet peers such as Tencent Holdings, Amazon, and Alphabet Inc., which have also developed auto-related technology or invested in smart-car startups.

Baidu has held preliminary talks without reaching any decisions, with automakers including Zhejiang Geely Holding Group Guangzhou Automobile Group Co. and China FAW Group Corp.’s Hongqi, on a possible venture, the people said.

They declined to be identified as the talks are private.

Baidu declined to comment. GAC said it has a strategic partnership with Baidu and that any further cooperation was subject to discussion. Geely said it was not familiar with the matter. FAW did not respond to a request for comment.

Baidu established the autonomous driving unit Apollo in 2017. The unit mainly supplies technology powered by artificial intelligence and work with automakers such as Geely, Volkswagen Group, Toyota Motor, and Ford Motor Co.