Volvo has agreed to supply Uber Technologies Inc. with a fleet of 24,000 self-driving taxis starting in 2019, reports The Wall Street Journal. This is one of the first and biggest commercial orders for these vehicles.
Volvo, owned by China’s Zhejiang Geely Holding Group Co., and Uber disclosed the deal on Monday as a framework agreement that has no financial terms. This order would account for about 4.5 percent of Volvo’s current total sales, based on 2016 figures, reports WSJ. It is estimated to be worth just over $1 billion.
Many automobile companies and tech firms have promised broad deployment of self-driving cars in the near future. However, none of the technology, regulation, and legal framework needed for the practical use of these robot cars is in place, reports WSJ. But that doesn’t stop industry executives from predicting with more and more confidence that these cars will be on the road in just a matter of years.
The deal between Volvo and Uber is one of the most concrete deals between two big players in the field for the production of a large number of cars, reports WSJ. The delivery date is also only two years away and marks the first hard deadline that an automaker has set for rolling out the working model.
WSJ writes that Volvo has been working with Uber to develop self-driving cars for a long time now. Under the new agreement, Volvo will supply Uber with a “base car” that seats up for seven passengers.
“The base vehicles incorporate all necessary safety, redundancy and core autonomous driving technologies that are required for Uber to add its own self-driving technology,” Volvo Cars Chief Executive Hakan Samuelsson said, according to WSJ. “Uber will adapt the software to make it ride-hailing.”
This article was featured in the InsideHook newsletter. Sign up now.
