Uber plans to buy up to 24,000 self-driving cars from Volvo, marking the transition of the US firm from an app used to summon a taxi to the owner and operator of a fleet of cars.
The non-binding framework deal could offer San Francisco-based Uber a way to overcome setbacks at its autonomous driving division in Silicon Valley’s race to perfect self-driving systems.
No financial details were disclosed for the purchase, which would be a massive new investment for Uber and mark a change from its long-standing business model where contractor drivers buy or lease and maintain their own cars.
Combining Volvo’s cars with Uber’s self-driving system builds on their nearly three-year relationship and comes as Uber’s autonomous driving unit has been hit by a lawsuit over trade secrets and the departure of top talent.
Carmakers, taxi-hailing firms and tech startups have been forging loose alliances in an effort to advance self-driving technology and claim a piece of what is expected to be a multi- billion-euro business.
Geely-owned Volvo said in a statement it would provide Uber with its flagship XC90 SUVs equipped with autonomous technology as part of a non-exclusive deal from 2019 to 2021. A Volvo spokesman said it covered up to 24,000 cars. The self-driving system that would be used in the Volvo cars — which have yet to be built — is under development by Uber’s Advanced Technologies Group.
Should Uber buy all 24,000 cars, it would be Volvo’s largest order by far and the biggest sale in the autonomous vehicle industry, giving Uber, which is losing more than $600m (€509m) a quarter, its first commercial fleet of cars. A new Volvo XC90 typically retails from a starting price of around €66,000 in Ireland.
Uber has been testing prototype Volvo cars for more than a year, with safety drivers in the front seat to intervene if the self-driving system fails, in Tempe, Arizona and Pittsburgh.
Meanwhile, Mercedes-Benz said it is ramping up its offering of electric delivery vans after Deutsche Post switched from customer to competitor with the successful introduction of a no-frills battery-powered vehicle.
In the second half of 2018, the Daimler unit will start deliveries of the €39,990 eVito, which has a driving range of 150km.
“We are convinced by the necessity of electric drive in our vans”, especially amid growing concerns over air quality in city centres, Volker Mornhinweg, who heads Mercedes’s van division, said.
Reuters and Bloomberg