Volvo Cars and Geely Holding are forming a joint venture to share technology and produce economies of scale that will allow a more rapid development of next-generation electric-vehicle technology.
Under their memorandum of understanding, Volvo, Geely Auto and Lynk & Co. will share vehicle architecture and engine technologies through cross-licensing arrangements managed by the new JV. They also will work closely to increase their common sourcing of components and to reduce procurement costs.
Volvo Cars, Geely Auto and Lynk are controlled by Geely Holding.
The new JV, to be 50/50 owned by Volvo and Geely Holding, will be headquartered in China with a subsidiary in Gothenburg, Sweden.
Volvo President and CEO Håkan Samuelsson says partnerships to share know-how and technologies are common in the industry.
“This is the model we are adopting,” he says in a statement. “This planned collaboration will strengthen Volvo’s ability to develop next-generation electrified cars.”
Volvo and Geely already share technology, most notably the compact modular architecture being used by Volvo for its soon-to-be-announced smaller range of 40-series cars, and by Lynk.
The intellectual property rights for the technology will remain with the company that developed it, but will be available for use by Volvo, Geely Auto and Lynk through license agreements.
Future modular vehicle architectures and other technology will be shared and developed based on cost-sharing agreements.
The collaboration could be extended to cover EV components such as battery cells, electric motors and charging systems.
Volvo also announces it is taking a “significant” minority shareholding in Lynk, which now will be jointly owned by Geely Holding, Geely Auto and Volvo Cars.
Geely Holding Chairman Li Shufu says the JV will unlock significant benefits by sharing technologies and next-generation vehicle architectures.
“I am confident these synergies can be achieved while preserving the separate identities and strategic autonomy of our different automotive brands,” he says.