June 19, 2019 / 10:18 AM / 4 months ago

China's Geely picks Swedish software firm for driverless cars

STOCKHOLM (Reuters) - China’s Geely has chosen Zenuity, a joint venture between its Volvo car marque and Swedish technology group Veoneer, as its preferred supplier for assisted and self driving software.

FILE PHOTO: Visitors look at a Geely Jiaji vehicle displayed during the media day for the Shanghai auto show in Shanghai, China April 16, 2019. REUTERS/Aly Song/File Photo

Geely’s deal, encompassing car brands including Geely Auto, performance brand Polestar, subscription-based electric carmaker Lynk & Co and British sports car maker Lotus, provides a welcome boost for Zenuity.

Regulatory challenges and soaring development costs mean carmakers have delayed forecasts for the mass adoption of self-driving cars, putting pressure on suppliers such as Zenuity, which declined to comment on financial terms on Wednesday.

Veoneer said in April it was carrying out a review of Zenuity, which is focused on developing software for assisted driving features (ADAS) such as lane keeping and autonomous driving (AD), and seeking efficiencies from the venture.

Chief Executive Dennis Nobelius said the Geely deal was a significant win as only 3-5 first generation self-driving software platforms would survive to the end of the next decade, compared to the more than 40 CB Insights estimates exist now.

“Our plan is clear, that we want to be one of those,” he told journalists. “We have a number of RFQs (request for quotation) at this moment for ADAS and we’re discussing deeper relations when it comes to the AD part.”

Nobelius said a German vehicle manufacturer would produce models with Zenuity ADAS features in the coming weeks.

Zenuity’s entire ADAS software stack along with parent Veoneer’s sensors were being showcased to customers and experts at a event in Detroit, Michigan later on Wednesday.

UNCERTAIN ROAD

Gothenburg-based Zenuity was formed in 2017 by Volvo, which Geely bought from Ford in 2010, and former Veoneer parent Autoliv, which put 1.1 billion Swedish crown ($115 million) in the venture.

It is competing with larger rivals in self-driving technology, where U.S. companies are leading the way, with Google’s Waymo last year winning the first approval to test cars without safety drivers on Californian roads.

Zenuity, whose customers include Volvo and Geely Auto, employs more than 600 people and this year won approval to begin hands-free testing on Volvos on Swedish highways.

Technology advisor Erik Coelingh said Zenuity’s edge came from the fact that it had products for both ADAS and AD.

“Exactly when AD will come in large volume is relatively uncertain, but until cars drive themselves then you will have ADAS,” Coelingh said. “So the fact that we have both really is a very good position to be in this uncertain market.”

Reporting by Esha Vaish in Stockholm; Editing by Johannes Hellstrom and Alexander Smith

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