Volvo Cars calls on Baidu to develop robotaxi in China

STOCKHOLM (Reuters) – Volvo Cars has partnered with Chinese search engine operator, Baidu, to develop a self-heating taxi for China, a new frontier announced Thursday to secure its place on the robotaxi market, while its supply contract with Uber remains unresolved.

The Swedish manufacturer belonging to the Chinese company is part of the growing list of car manufacturers who join technology companies or competitors to share the enormous cost of developing functional and safe autonomous driving systems.

Volvo said the company would give it access to Baidu's Apollo autonomous driving software, which it plans to use to develop a so-called Level 4 car, one of the most sophisticated cars ever designed by Volvo.

The higher level 5 designation is for vehicles that should be able to navigate the roads without driver intervention in all conditions.

CEO Hakan Samuelsson said he expects robotaxis sales to mobile operators to represent a "significant share" of the vehicles needed to reach his goal of achieving one-third of his autonomous car sales. here 2025.

"Robotaxis is a segment where we will not compete as operators, but by selling cars to companies we have already sold," he told Reuters.

The race is about to be the first to introduce a standalone product into the road racing market, which already accounts for more than 30% of the global taxi market. Goldman Sachs analysts estimate that the market value of tour packages could increase eightfold to $ 285 billion by 2030.

Volvo is trying to progress as a midsize luxury player with more limited resources than a BMW or Audi. He was forced to abandon his plans for the first public offering this year due to international trade tensions and falling stock prices in the auto sector. .

KEY TO PARTNERSHIPS

Samuelsson said he expects autonomous and electric vehicle development costs to account for approximately 5% of his business turnover and that partnerships are essential, such as his initiative with technology company Veoneer to to develop drivers for cars that can be sold to private individuals.

"We need to be humble and say that we need new partnerships to be strong in this segment … We certainly can not do it in our normal development sector," he said.

Samuelsson expects partnerships with battery suppliers as well as producers of components such as electric motors, inverters and chargers, but indicated that the company still had the intention of developing its own group electric power train.

Volvo did not say when the Baidu car would be ready for production and its current robotics sales program would largely depend on its agreement to supply up to 24,000 Uber 1 and 2 autopilot cars to Uber between 2019 and 2021.

This deal was questioned when Uber terminated its road test program after a recent fatal collision, but Samuelsson said the deal was "on track" with deliveries planned for the weekend. Next year.

However, three sources close to the case told Reuters that Uber had no intention of buying anywhere near the 24,000 cars scheduled in the deal, which makes Baidu's merger a reality. All the more important for Volvo.

Samuelsson said that the agreement with Baidu did not constitute a supply agreement, but that it was considered a first step in the Chinese market, which, according to industry forecasts, could become the largest autonomous car market in the coming decades.

Last year, Baidu opened Apollo to third parties to accelerate its development against fierce competition from Google Waymo and US manufacturer Tesla.

Since then, BMW has been chosen as a consultant and has announced plans to start testing autonomous cars with Ford by the end of the year.