Volvo Cars and Geely Create Tech Venture
Seeking to leverage synergies and economies of scale, Volvo Cars and parent company Zhejiang Geely Holding announced a joint venture to share vehicle architecture and engine technologies, including future electrified powertrains. The new JV, 50/50 co-owned by Volvo and Geely, also includes the startup firm Lynk & Co, which plans to begin selling vehicles incorporating various Volvo technologies in America next year. Under the agreement, intellectual property rights for shared tech will remain with the organization that created it or led the development process. However either of the other firms will have full access under various licensing arrangements.
“Partnerships to share know-how and technologies are common practice in the automotive industry. This is the model we are adopting,” said Håkan Samuelsson, Volvo president and chief executive. In a separate announcement, Volvo also agreed to acquire a “significant minority holding” in Lynk & Co, which it will then jointly co-own with Geely. “We will unlock significant benefits across our portfolio by sharing both technologies and next-generation vehicle architectures,” noted Li Shufu, chairman of Geely Holding. “I’m confident these synergies can be achieved while preserving the separate identities and strategic autonomy of our different automotive brands.”
Volvo Cars and Geely are involved in technology sharing on several levels, the most notable being the Compact Modular Architecture which underpins Volvo’s upcoming 40 Series range and also will be used by the first Lynk & Co offerings. In addition to more traditional components, the new agreement will embrace elements related to electrified powertrains including advanced motors, battery cells and charging systems. This dovetails nicely with Volvo’s recent decision that every new vehicle it produces from 2019 on will feature either hybrid or EV power.
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