Volvo plugs into electric cars future with sister companies

VOLVO is linking up with other firms owned by its parent company Zhejiang Geely as they look to share the burden of developing electric cars.

The move came as Volvo – which a fortnight ago said all its new cars from 2019 would be available with an electric drivetrain – reported surging revenues and profits.

The Swedish car maker was bought by Geely, the Chinese billionaire Li Shufu’s holding company, in 2010.

Acquisitive Mr Li’s stable of businesses now includes Chinese car maker Geely, electric car business Lynk & Co, Lotus, and the London Taxi Company, which earlier this month renamed itself the London Electric Vehicle Company.

Under the terms of the tie-up, Volvo and Geely will establish a 50:50 joint venture to produce systems for electric cars, which will be based in China with a Swedish subsidiary.

Volvo, Geely and Lynk will share technology through the new venture and also work more closely to cut costs by sharing components and procurement. Håkan Samuelsson, chief executive of Volvo, said: “Partnerships to share know-how and technologies are common practice in the automotive industry. This collaboration will strengthen Volvo’s ability to develop next-generation electrified cars.”

He added that cost savings through the joint venture would free up more resources to pump into the development of electric vehicles.

Volvo and Geely already share some technologies but the agreement will formalise the relationship and help Mr Li’s push to make his automotive empire a major force globally.

Reporting interim results, Volvo said its revenues rose 17.7pc to 99.1bn Swedish kronor (£9.2bn), and operating profit was 21.4pc stronger at Skr6.8bn. Vehicles sales were 8.2pc better at 277,641.