Swedish carmaker Volvo has signed a framework agreement with ride-hailing firm Uber to supply tens of thousands of autonomous-compatible vehicles between 2019 and 2021.
The XC90 SUVs are to be 'base' vehicles, which incorporate a degree of autonomous capability but which are designed to have Uber's proprietary driverless tech added on top.
“Our aim is to be the supplier of choice for AD ride-sharing service providers globally,” said Håkan Samuelsson, president and chief executive of Volvo.
“Today’s agreement with Uber is a primary example of that strategic direction.”
Uber has already been experimenting with driverless technology in the US, and has had a relationship with Volvo for over two years, but this massive investment in hardware represents a big change in direction and the first such purchase by a ride-hailing provider.
If Uber buys all 24,000 Volvo vehicles, it will also be one of the largest orders in the history of the manufacturer. It is also the most significant deal since Chinese company Geely took ownership of the Swedish oufit in 2010.
The news comes weeks after Waymo, Uber's key competitor, began testing driverless cars in Arizona with no back-up driver.
Driver wages are among the largest expenditures for a ride-hailing provider, which acts as a sort of app-based minicab service. Reducing this cost by introducing driverless technology is a key objective in this increasingly competitive market.
Autonomous vehicles will also allow more sophisticated shared mobility models to develop and potentially reduce the need for individual car ownership and use.
-Telegraph