Volvo Cars and Geely Auto have agreed on a wide-ranging collaboration that will maximise the strengths of the Swedish and Chinese automotive groups. It will deliver synergies in powertrains, sharing of electric vehicle architecture, joint procurement, autonomous drive technologies and after-sales.
This joint venture by Geely Holdings, who own Lynk and Co, Lotus, Polestar and Proton alongside Volvo and Geely car brands, will allow them to open up markets and secure new growth opportunities in their respective areas. Plus, it will result in the expanded use of shared modular architectures for electric vehicles (EVs).
This can only be a good thing as the world shifts to driving zero-emission electric cars. It will also allow Geely and Volvo to meet evolving industry challenges through deeper cooperation, while preserving their existing separate corporate structures. Through the collaboration, the two companies will focus on the development and sourcing of next-generation technologies, from connectivity and autonomous drive to car-sharing and electrification.
Volvo and Geely are planning to share and jointly source batteries, electric motors and connectivity solutions that will generate valuable synergies. This will include the joint development of a world-leading autonomous driving (AD) solution under the lead of Zenseact, Volvo Cars’ AD software development company.
The two companies, which are planning to share the new SEA and SPA2 electric architectures among their brands, have launched combined efforts to drive speed and efficiencies in the development of hardware and software for the next-generation world-leading modular EV architectures.
Intended sharing of platforms and architectures between the companies will drive additional synergies and allow for an expansion of product portfolios across the Volvo Cars, Geely, Lynk & Co and Polestar brands, and external partners.
Leveraging Volvo Cars’ existing distribution and service network, the two companies will also collaborate on the global expansion of the jointly owned Lynk & Co brand.
The collaboration agreement has been welcomed by Li Shufu, chairman of Geely Holding, the parent company of Volvo Cars and the largest shareholder in Geely Auto. This collaboration should result in a wider choice of electric cars on the global market and help to keep prices competitive, which is good when it comes to helping electric car adoption.
Håkan Samuelsson, president and CEO of Volvo Cars, said:
“Having evaluated different options to realise value, we concluded jointly that a collaboration model between two standalone companies is the best way to secure continued growth and at the same time achieve technological synergies in many areas. We welcome the opportunity of further and deeper collaboration with Geely Auto.”
An Conghui, president and CEO of Geely Auto, said:
“Geely Auto looks forward to partnering more closely with Volvo Cars, achieving significant synergies for our respective businesses. This will enable Geely Auto to accelerate its global expansion, to capitalise on our strengths in China and develop a new generation of world-class new-energy vehicles and associated mobility services.”