Under the agreement, Volvo will set up a new stand-alone company to take over Zenuity's current development and commercialization of unsupervised autonomous drive software.
Veoneer will integrate and operate the current Zenuity business focused on development and commercialization of advanced driver assistance system (ADAS) software.
"The intent is for each party to pursue what’s the most critical core competence for them," Veoneer Chief Technology Officer Nishant Batra told Automotive News Europe. "Volvo wants to be a leader in autonomous driving and our intent is to more effectively pursue what we call advanced ADAS in the collaborative driving space."
Batra said that because Veoneer serves all automakers it made sense for it to take the part of Zenuity that works on ADAS because there is a much large market for driver assistance solutions than for autonomous driving technology.
Morgan Stanley said that expectations for the launch of full-autonomous driving were pushed back significantly last year, therefore it was not surprised that Veoneer will now focus just on ADAS solutions that help the driver without taking full control of the car.
Volvo CTO Henrik Green said that a strategic benefit for the automaker is that its new company will be able to focus fully on the continued development of Zenuity’s so-called Z2 autonomous driving software for the next generation of its SPA architecture, known as SPA2.
"This will enable autonomous driving functionality on highways, which we call Highway Pilot, that will assist you during your daily commute," Green told ANE. He added that the system would provide Level 4 autonomy on sections of road where cars are allowed to drive themselves. "With that technology, we believe we can take a significant step forward on active safety, so that this where Volvo wants to put all its focus and effort."
Volvo has previously said that its Level 4 autonomy would be ready in the early part of this decade. That number is starting to be more specific, but with some conditions.
"If I would put a year on it today, it's 2022," Green said. "The main reason why we are not being overly specific is because we will always prioritize safety. We would never activate this function until we have fully verified that it's absolutely safe. It currently remains to be seen when we will feel truly comfortable that we can do so."