Volvo, ECARX Team Up To Develop Smart Car System

The Swedish automaker Volvo has joined forces with the smart car tech startup ECARX to develop in-car operation software, the two companies announced on Tuesday (March 23).

According to Reuters, the project — which will be headquartered in Gothenburg, Sweden — will develop software for Volvo Cars, as well as some brands under the Zhejiang Geely Holding Group and possibly for other carmakers. ECARX, which was founded by CEO Shen Ziyu and Geely Chairman Li Shufu in 2016, develops technology for car chips, high-definition maps and smart vehicles.

“The planned joint venture would allow both companies and the wider Geely Group to speed up technology development, improve cost efficiency and create new revenue streams,” the companies said in a statement.

The announcement follows months of fundraising by ECARX, which says it has a valuation of more than $2 billion. As Reuters noted, ECARX raised more than $200 million from investors in February and another $195 million in October 2020.

The announcement follows Volvo’s rollout last year of the Care By Volvo plan, which it called the “modern way to lease a car,” allowing customers to pay one monthly payment to get their vehicle with insurance and maintenance, along with the option to cancel after four months.

There is also a significant untapped market when it comes to smart car technology. As PYMNTS’ How We Will Pay survey of commuters found, only 30 percent of consumers own a “connected” car, a figure that shows the growth potential in the automotive tech world.

In addition, PYMNTS’ study — conducted in part with Visa — found that the more time people spent commuting, the more connected they want to be, to the point that commuters used 80 percent more connected devices to multitask on the go than people who don’t commute.

This will become especially crucial as the COVID-19 pandemic abates and more people return to work. As Ericsson’s Daily Commute report discovered, while most people suspect they will return to commuting when the pandemic is over, only 25 percent of them actually look forward to that prospect.