Volvo steps up driverless vehicle technology race

VOLVO Cars is betting driverless vehicles will make up one-third of its deliveries by the middle of the next decade, setting the car industry’s most ambitious target yet for the new technology.

Half of the cars the Swedish company offers will be available through its subscription service, creating links to more than 5 million consumers and generating new sources of revenue, Volvo said yesterday in a business strategy update. It reiterated a target to match other luxury-carmakers’ profit margins, saying sales growth would be propelled by demand from robo-taxi operators.

“These initiatives will help transform Volvo from being purely a car company to being a direct consumer-services provider,” chief executive Hakan Samuelsson said. The carmaker was formerly the auto unit of truck manufacturer Volvo and is now owned by Chinese billionaire Li Shufu’s Zhejiang Geely group.

Driverless vehicles were still in an early phase of development, and tests have been hampered by a string of fatal accidents. Even so, tech companies and established car manufacturers, such as Alphabet’s Waymo and Fiat Chrysler Automobiles, are joining forces, and the UK announced a strategy this week to back projects. While several carmakers have included robotaxis in their planned future line-ups, Volvo Cars is the first prominent global brand to set a target for deliveries. Its sales rose 7 percent last year to 571 577 vehicles. – Bloomberg