Chinese internet giant Baidu (NASDAQ: BIDU) and Volvo 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.
According to Volvo CEO Hakan Samuelsson said,"With Baidu, we take a big step forward in commercializing our autonomous compatible cars, built on Volvo's industry-leading safety technology.”
Baidu said it chose Volvo as a partner due to its "long-standing safety credentials." Baidu President Ya-Qin Zhang telling the media, "Since its founding a century ago, Volvo has kept safety as its core mission, pushing safety development forward with significant innovations.”
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 U.S.), the company reported last week, down 50% 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.
Baidu shares dipped $3.21, or 1.7%, in New York at Thursday’s open to $186.86
