Ride-sharing company Uber Technologies Inc. will buy “tens of thousands” of self-driving capable Volvo XC90 SUVs from the Swedish-based luxury carmaker as part of an expanded partnership between the two companies.

Between 2019 and 2021, Volvo will supply Uber with autonomous-driving capable vehicles as part of a new, non-exclusive agreement. Uber confirmed it will buy up to 24,000 self-driving vehicles from Volvo as part of the deal with value worth more than $1 billion.  The companies did not disclose financials related to the deal. A Volvo XC90 currently begins at about $47,000 in the U.S.

The new Volvo-Uber pact signals the growing link and likely necessary relationships between automakers and tech companies in the rapid push toward developing and launching fully self-driving vehicles.

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Disruptive technology

“The automotive industry is being disrupted by technology and Volvo Cars chooses to be an active part of that disruption,” Håkan Samuelsson, Volvo president and CEO, said in a statement. “Our aim is to be the supplier of choice for AD ride-sharing service providers globally. Today’s agreement with Uber is a primary example of that strategic direction.”

The two companies announced in August 2016 that they were working to develop self-driving cars and that Uber planned to buy cars from Volvo. At that time, the companies said they were spending $300 million on the joint project. It’s not clear when Uber may introduce a fully autonomous car for its popular ride-hailing/sharing service, but it marks a milestone for the company in owning a fleet of vehicles.

“This new agreement puts us on a path towards mass produced self-driving vehicles at scale,” Jeff Miller, Uber’s head of auto alliances, said in a statement.

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Volvo says its base self-driving capable vehicles were developed from its Scalable Product Architecture (SPA). Volvo uses the SPA now on its premium 90 series sedans and on the XC60 midsize SUV.

Volvo engineers worked with Uber engineers to design and develop the XC90 SUVs, which are outfitted with required safety, redundancy and core self-driving technologies. San Francisco-based Uber will add its own self-driving technology on the XC90s. Meanwhile, Volvo continues to work on its own autonomous vehicle strategy and plans to launch its first fully self-driving car in 2021.

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