Volvo Cars and Geely Auto intend to deepen their already established cooperation with each other without moving ahead with the two companies' planned merger. Early last year, Volvo and Geely had announced an intention to become one entity.
The two organizations decided to end merger plans after concluding that each is more agile when operating as a standalone company. This pivot in direction will allow the two brands to stay separate but further expand their partnership and solidify their common future mobility goals. The Swedish automaker and its Chinese corporate cousin will now look to align and leverage their strengths in advanced powertrain, electric vehicle architecture, and autonomous driving technology development.
"We are encouraged by the potential synergies and growth opportunities created by this collaboration, which will create two even stronger globally competitive companies in the rapidly changing world of automotive technology and new mobility services," said Li Shufu, Chairman of Geely Holding, the parent company of Volvo Cars.
In combining their powertrain efforts, Volvo Cars and Geely Auto will establish a separate new company to produce efficient combustion engines, transmissions, and next-generation hybrid systems. Volvo, Geely, and other global vehicle manufacturers will use these components in future model offerings. The new powertrain company should begin operations within 12 months.
Other development, sourcing, and manufacturing synergies will benefit efforts in electrification. To that end, the two companies plan to share advancements in vehicle batteries and electric motors. Also, Volvo and Geely will focus on the proliferation of global modular EV platforms such as the new SEA and SPA2 architectures. The SEA platform will underpin small EVs, while SPA2 is for larger vehicle applications such as SUVs. Both SEA and SPA2 will support the expansion of EV offerings across the model lineups of Geely, Lynk & Co, Polestar, Volvo, and others.
Another area of focus for Volvo and Geely will be connectivity and autonomous driving technologies. The Volvo-owned autonomous driving software company, Zenseact, will helm much of this development. Zenseact's first completed effort will be technology for the SPA2 platform, including Highway Pilot, a Level 2+ semi-autonomous highway driving technology.
In addition to sharing powertrains, platforms, programming, and battery/electric motor components, the two companies will expand their jointly-owned automotive brand, Lynk & Co. Lynk & Co entered Europe in 2020 and plans to launch in other global markets in the near future.
The multi-faceted Volvo-Geely partnership promises myriad advantages to both brands, including supporting Volvo's plans for half its global sales to be electric vehicles by 2025.