- Chinese e-commerce giant Alibaba, tech firm Tencent and three state-owned automakers are among the investors behind a new $1.5 billion ride-hailing service in China, according to Reuters and others. The new venture, known as T3, is meant to compete with Didi Chuxing in what is estimated to be the world’s biggest ride-hailing market.
- The new company will focus on "car-sharing services powered by renewable energy," according to an announcement, aligning with the Chinese government’s push to electrify transportation.
- According to Reuters, retailer Suning will be the largest investor in T3 with a 19% stake, while automakers Changan, Dongfeng and FAW will each have a 15% stake.
Didi, which has backing from Uber Technologies and Japan’s SoftBank, has been the dominant ride-hailing force in Chinese cities, a market that Bain & Co estimated to be worth $23 billion. There have been some competitors, like BMW’s ReachNow and limousine service started by state-owned automaker Shouqi and a high-end ride-hailing, but none have seriously challenged Didi.
The significant backing from three automakers and online retailers should give T3 a boost. In the announcement, the partners said they wanted to draw on their individual strengths, like Alibaba’s data presence, to reach a bigger customer base. Although details are still emerging, TechCrunch reports that T3 plans to launch 5,000 cars in Nanjing by late May or early June.
T3 may have significant influence by focusing on clean energy vehicles, including electric cars. The Chinese government has been heavily promoting clean cars as a solution to the country’s notoriously bad air pollution, especially targeting fleet vehicles like taxis. A ride-hailing service dedicated to clean cars could expand the market for the technology, and make a dent in the mobility sector’s climate impact.
It also marks another avenue for Alibaba to enter the smart cities market. The e-commerce giant has been testing autonomous vehicles and last year rolled out a smart cities platform in Malaysia in an attempt to control the tech side of the smart cities space.