Volvo will provide cars for Didi’s autonomous vehicle division

Volvo will provide vehicles for Didi Chuxing’s self-driving taxi fleet, according to a new deal between the two companies. The Swedish automaker, which is owned by China’s largest private automaker Geely, will supply XC90 SUVs to Didi Autonomous Driving, the self-driving technology division of China’s vehicle-for-hire company.

Didi said it would use Volvo’s SUVs when it eventually launches a commercial robotaxi operation at a later date. The company has been testing its autonomous technology in Shanghai since 2019 as part of a pilot approved by the Chinese government.

It’s an interesting twist, considering Volvo used to be a partner in another global ride-hailing firm’s autonomous ambitions. Volvo had an agreement with Uber to deploy a fleet of self-driving taxis by 2019, but that plan was scrapped after an Uber test vehicle (an XC90 SUV) struck and killed a pedestrian in Tempe, Arizona, in 2017.

Still, the Swedish automaker maintained its partnership with Uber’s autonomous division, announcing a jointly developed self-driving version of the Volvo XC90 SUV in 2019. Last year, under pressure from investors, Uber sold its autonomous division to self-driving startup Aurora.

Notably, Volvo says the vehicles it will be supplying to Didi will be “equipped with necessary backup systems for functions such as steering and braking.” Those functions, such as automatic emergency braking, were disabled by Uber in the self-driving SUV that killed the pedestrian in Arizona in 2017.

Didi isn’t the only company to use Volvo’s Swedish engineered vehicles as part of a robotaxi fleet. Waymo, the self-driving division of Alphabet, announced last year that it would be the “exclusive global L4 partner” for Volvo and its sub-brands Polestar and Lynk & Co.

Volvo also has plans to sell customers partially automated vehicles equipped with LIDAR sensors made by US startup Luminar. The automaker said its vehicles will be able to drive themselves on highways hands-free, with no human intervention, and will start rolling off the production line in 2022.

Didi started its ride-hailing business in China in 2012. It nabbed $1 billion from Apple in 2016, the same time it was locked in an intense competition with Uber for China’s rapidly growing ride-hail market and had started poaching engineers from Silicon Valley to come work for its nascent self-driving program.

Eventually, the battle grew too costly for Uber, which was reportedly burning through $1 billion a year to compete with the Chinese firm. In August 2016, then-Uber CEO Travis Kalanick said he would sell Uber’s Chinese business to Didi for a 17.7 percent stake in Didi and a seat on the company’s board. In exchange, Didi invested $1 billion in Uber.

Didi has also invested in many of Uber’s rivals, including Lyft, India’s Ola, Singapore-headquartered Grab, Estonia’s Taxify, Careem in the Middle East (which was later acquired by Uber), and Brazil’s 99. Didi expanded into Mexico in 2018, intensifying its global rivalry with Uber.