Zhejiang Geely Holding Group will start producing satellites by October this year to offer better positioning and navigation for the vehicles it produces and to take on Tesla owner Elon Musk in terms of satellite-based internet services.
A plant in Taizhou, Zhejiang province, has won the approval from the authorities, said its subsidiary Geely Technology in a statement on Thursday, without disclosing the investment amount. It said production is expected to commence eight months from now as the first piece of equipment has entered the plant, and up to 500 satellites could be produced a year for various commercial operations.
The group, which is the owner of Volvo, unveiled its low-orbit satellite network plan earlier last year. It had planned to launch its first satellites in late 2020, but the plan was put off, said a company representative, without offering a new schedule.
Geely said low-orbit satellites will provide an accuracy of several centimeters, as opposed to that of medium-orbit satellites such as the United States' Global Positioning System, whose accuracy is measured in meters.
"In-vehicle connectivity is emerging as an inevitable trend. As drivers and passengers now want better and better mobility experience, autonomous driving itself needs to be improved accordingly," said the group.
The group started to make inroads into the satellite industry in 2018, by establishing a subsidiary called GeeSpace, which is primarily specialized in satellite development, operation and launches.
In late January, the group kicked off a 4.12 billion yuan ($638 million) satellite internet project in Qingdao, East China's Shandong province, and entrusted GeeSpace for the task.
"The project is designed to build a global communication provider that will help users in China and economies along the Belt and Road initiative to access satellite-based internet services," said Geely.
Currently the internet has become part of many people's daily lives, which is primarily built on a network of ground base stations. That means the service is not available in around 80 percent of the land and 95 percent of the oceans' surface, according to Zhang Di, a senior executive of China Aerospace Science and Industry Corp.
In comparison, the satellite-based internet is built based on a constellation of low-orbit satellites and so it can cover every corner of the world, said Zhang.
Such a service would enable companies that operate in remote and hard-to-reach areas to have access to the internet, and the service will be immune to accidents such as earthquakes and volcanic eruptions.
China unveiled its first satellite-based internet plan in 2018, with a total of 80 satellites to be launched by 2023. Several other programs have been introduced subsequently.
Earlier last year, the central government included the sector in the country's new infrastructure initiative. Some cities, including Shanghai and Beijing, have also promulgated favorable policies.
Analysts at TF Securities estimate the satellite internet industry in China will have an output value of 400 billion yuan in 2028.
Globally, companies including Elon Musk's SpaceX and Amazon have been launching low-orbit satellites to offer internet services.
SpaceX began a trial program in late 2020 and now has over 10,000 users. Currently, data speeds vary from 50 to 150 megabits per second in most locations, at $99 per month.