Volvo Car Group has agreed to a $300 million alliance with Uber to develop self-driving cars, the latest move by traditional vehicle manufacturers to team up with Silicon Valley firms long seen as disruptive threats to their industry.
The partnership will see the Swedish-based carmaker, owned by China’s Geely, and ride-hailing service Uber pool resources into initially developing the autonomous driving capabilities of its flagship XC90 SUV. The investment will be roughly shared equally by the two companies.
Uber will purchase Volvos and then install its own driverless control system for the specific needs of its ride-hailing service.
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Volvo will use the same vehicle for its own autonomous driving project, which is based on a plan that still envisages having a driver in the car.
The investment will go toward researching and developing both hardware, such as sensors used to detect traffic and obstacles, as well as software for the self-driving cars.