Uber intends to buy twenty-four thousand self-driving cars from Volvo, bringing a change to the United States organization from an application that is used for ordering a cab.
The non-binding structure of the agreement would be offering the San Francisco based Uber a way to overcome the challenges being faced at its autonomous driving department in Silicon Valley’s competition to make the best self-driving systems.
Volvo is one of the biggest Sweden carmakers by profits and has forecasted a fourth straight year of record marking sale in 2017.
Volvo’s cars installed with the Uber’s self-driving system further strengthens the companies already built three or more years relationship. Uber’s autonomous driving cars got immense appreciation by the lawsuit upon the trade secrets and the departure of the talent.
Car manufacturers, ride-hailing service providers, and technology starting up firms have been looking for making such partnerships in order to advance the self-driving technology and to claim a share in what is anticipated to be a multi-billion-dollar venture.
It was mentioned in a statement by Geely-owned Volvo on Monday that Volvo would be providing Uber with its flagship XC90 SUVs installed with the autonomous technology as part of their non-binding agreement from 2019 till 2021.
A spokesperson of Volvo informed that twenty-four thousand cars would be covered under this non-exclusive deal.
Uber’s Advanced Technologies Group is working on the development of the self-driving independent system that is to be installed in the Volvo cars.
Would Uber be buying all the twenty-four thousand cars making its first fleet of commercial cars and simultaneously providing Volvo its largest order so far and also marking the largest sale in the autonomous automobile industry.
A brand-new Volvo XC90 is available typically around the price of $50,000.
Uber has been occupied with the testing prototype of the Volvo cars since a year or so in Tempe, Pittsburgh, and Arizona, by placing the safety drivers in the front seat to take control in case the autonomous driving system fails.
Jeff Miller—Head of Automotive Alliances—Uber mentioned that the objective of the firm from day one was to make investments in such an automobile that could be made at large scale.
These self-driving cars could be ordered using the Uber app.
Miller further mentioned that the cars would be put into operations only when the car operators are removed from the vehicle.
The financial details have not been shared so far relating the purchase but this would definitely be a massive investment by Uber and would bring a change in the Uber’s long-standing business system where the contractual car operators would either be buying or leasing the cars and would also be maintaining them.
Miller said that some cars would be sold on equity and other on debt financing.
The Volvo—Uber deal of $300 million collaboration was announced last year focusing on the designing and financing of the vehicle with the self-driving systems. These cars would be needing a different kind of braking system, sensors, and steering.
Hakan Samuelsson—CEO Volvo Cars said that it is a massive commercial business deal and that they would be getting assistance for the development of these cars.