China’s 3 largest automakers and 2 largest tech giants have joined forces to launch a new ridesharing platform to challenge dominant Didi Chuxing.
The new venture, T3 (short for ‘top 3,’ as in top 3 automakers) involves 12 partners — both private and state-owned — who’ve chipped in $1.45B to get the tires rolling.
Normally, Alibaba and Tencent compete in everything from messaging to media to micro-mobility — so, what convinced the 2 tech giants to become friends?
The answer is a “mixed ownership reform” program that was launched by the Chinese government last year. The program made it easier for private companies (like Alibaba and Tencent) to join public companies (such as China’s state-owned top 3 automakers) as equity partners.
T3’s largest shareholder, Suning, a private home appliance giant, will have 17% equity. The top 3 automakers will have 16% ownership apiece, with the remainder split among Alibaba, Tencent, and other partners.
The power-packed partnership still needs to haul a** to catch up to Didi, which has dominated the market since it ousted Uber in 2016. T3’s $1.45B in funding will need to go a long way to compete with Didi’s $50B valuation.
Plus, Didi isn’t the only player ridesharing Chinese roads: Geely-backed app Caocao and Alibaba-backed outfit Hello TransTech have both gained traction, and BMW recently became the first foreign automaker to launch a ridesharing service in China.
T3 expects to get its first 5k cars on the road by June.