Volvo Cars has taken 100 per cent ownership of its autonomous driving (AD) software development subsidiary, Zenseact, as part of continued restructuring.
Previously the company owned 86.5% in a joint venture with Ecarx, headquartered in China, and has paid $115m for the remaining stake. This values the subsidiary at $851m, a key marker in the value of AD software firms.
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This also comes two weeks after Ecarx floated on the US Nasdaq stock exchange in a reverse merger with a special acquisition company (SPAC) called Cova.
The acquisition of the 13.5 per cent stake is a strategic step to owning more of the software powering key functionality going into future cars and supports Volvo Cars’ strategic direction to be a leader in new technology, backed by Chinese car maker Geely.
The deal simplifies Zenseact ownership, making the AD software company a fully owned subsidiary that will operate as a standalone company and lead development of safety-, advanced driver assistance- and autonomous driving technologies for introduction first in Volvo and Polestar cars.
In November, Volvo sold its stake in its powertrain supplier spin out Aurobay to Geely to focus on electric vehicle development. Aurobay was formed from Powertrain Engineering Sweden and including its Skövde-based engine plant and the related R&D team, along with its engine plant in China and other relevant assets. It remains a strategic partner to Volvo Cars and the sole provider of hybrids and mild-hybrid powertrains.
“We are impressed by the progress Aurobay has made as a separate entity since its creation in 2021,” said Javier Varela, chief operating officer and deputy CEO at Volvo Cars. “In line with our ambition to become fully electric by 2030, Aurobay remains our strategic supplier.”
The ongoing collaboration discussions between Zenseact and ECARX will continue as planned, say both companies.
Ecarx was founded in 2017 and provides a customisable vertically integrated technology stack to automotive brands. It saw $415 million in revenue in 2021 and its technology has been integrated into more than 3.7 million cars serving 12 OEM brands across Asia and Europe.
“Ecarx began as an independent company in 2017 when my co-founder Ziyu Shen and I, shared a vision to drive rapid evolution of the automotive industry by creating the software and hardware needed to transform cars into fully connected computers on wheels,” said Eric Li (Li Shufu), co-founder and largest shareholder of Ecarx. “I have great confidence Ecarx will continue this growth journey and become a leading partner to global brands as they transition to a smart mobility future.”
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