Volvo and Baidu join forces to mass produce self-driving electric cars in China

  • Volvo Cars will offer its expertise in advanced technologies in the auto industry, while Baidu provides its autonomous driving platform Apollo.
  • The long-term aim is for the two firms to sell the self-driving vehicles to Chinese customers.
  • China is home to a rapidly growing autonomous vehicles sector, with multiple tech firms in the country vying to own the space.
The logo of Volvo.
Metin Aktas | Anadolu Agency | Getty Images
The logo of Volvo.

Volvo Cars and Chinese internet giant Baidu have teamed up to develop and mass produce self-driving electric cars in China, the two firms said on Thursday.

The Swedish carmaker, which is owned by Chinese auto manufacturer Geely, will offer its expertise in advanced technologies in the auto industry, while Baidu provides its autonomous driving platform Apollo, the two companies said in separate statements.

The long-term aim is for the firms to sell vehicles that meet SAE International's Level 4 (L4) standard for driverless vehicles — meaning vehicles that do not require human intervention in certain conditions — to Chinese customers.

Financial information about the deal was not disclosed by either of the companies.

"With Baidu we take a big step forward in commercialising our autonomous compatible cars, built on Volvo's industry-leading safety technology," Hakan Samuelsson, president and chief executive of Volvo Cars, said in a statement.

"There is a strong development in autonomous drive in China, where Baidu is a leading player, and the market there offers huge opportunities for us as the supplier of choice for autonomous fleets."

Hakan Samuelsson, president and chief executive of Volvo Cars, left, on stage at Baidu World 2018, alongside Ya-Qin Zhang, president of Baidu.
Baidu
Hakan Samuelsson, president and chief executive of Volvo Cars, left, on stage at Baidu World 2018, alongside Ya-Qin Zhang, president of Baidu.

Baidu said it chose Volvo as a partner due to its "long-standing safety credentials."

"Since its founding a century ago, Volvo has kept safety as its core mission, pushing safety development forward with significant innovations," Ya-Qin Zhang, president of Baidu, said in a statement.

"We are very glad that Volvo Cars has established a strategic partnership with Baidu in the development of a fully autonomous car compatible with our autonomous driving platform Apollo. We look forward to working closely with Volvo to provide the world with the safest auto products for the benefit of humankind."

China is home to a rapidly growing autonomous vehicles sector, with multiple tech firms in the country — including Baidu, Tencent and Didi Chuxing — all vying to own the space.

Meanwhile, various European automotive firms — Volvo included — have been making their own strides in the field. German auto giant Daimler was the first international automaker to receive a permit to test driverless vehicles in Beijing.

Baidu is China's largest search engine, and the firm has been making its presence known in the West increasingly, driving areas like artificial intelligence and self-driving beyond its home market. On Wednesday, it announced a deal with U.S. auto giant Ford that would see the two developing and testing driverless vehicles for two years. On-road testing for that partnership is expected to begin by the end of this year.

Volvo Cars said it expects to make a third of its annual sales from driverless cars by 2025. Its third-quarter operating income fell to 1.84 billion Swedish krona ($201.7 million), the company reported last week, down 50 percent from the previous year.

The firm had been aiming to launch an initial public offering, but it put plans for the flotation on hold in September due to concerns over global trade tensions and a rout in the share prices of auto companies.

While there is no set deadline on when these cars will be launched, Baidu said in a statement that both companies aim to achieve "mass production of the autonomous cars over the next few years."

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