Volvo Cars fully acquires Zenseact driving software company

Volvo Cars has taken over Zenseact driving software company after acquiring a 13.5% stake which increased its ownership to 100%. The deal effectively made the Swedish multinational manufacturer of luxury vehicles the new owner of Zenseact.

Prior to taking full ownership, the autonomous driving software firm was one of Volvo Cars’ subsidiaries. The full acquisition was formally announced the past weekend.

The automaker said that it purchased 13.5% of Zenseact shares from ECARX Co. Ltd., a firm that provides digital cockpit electronics, active safety electronics, unmanned driving sensors, and controllers for vehicles. Volvo Cars already owned 86.5% of the company before it bought the remaining percentage, so it now obtained 100% ownership.

According to Reuters, even after the deal where Volvo Cars purchased ECARX’s shares, Zeneact will remain a standalone company. Its operations will also continue as a separate entity from the carmaker. Then again, the discussions on cooperation between Zenseact and ECARX will still proceed as planned.

It was in 2021 when ECARX presented Zenseact with a strategic investment. At that time, the former asked for a 15% share in the software company. In that same year, the latter also signed a deal with Luminar Technologies to provide a combined hardware and software system to car manufacturers so there is also an ongoing partnership deal prior to the full acquisition.

This is a strategic move on the part of Volvo Car because it is considered the first step in owning more software that will give it more power in creating essential functionality for the car manufacturing process of future cars. This also supports the carmakers’ strategic goal of becoming a leader in new technology.

“With this transaction, Volvo Cars further clarifies and simplifies Zenseact ownership, making the AD software company a fully owned subsidiary of Volvo Cars,” Volvo stated in a press release. “Zenseact will continue to remain and operate as a standalone company and lead the development of safety, advanced driver assistance, and autonomous driving technologies for introduction first in Volvo and Polestar cars.”

Meanwhile, the buyout deal of a stake in Zenseact was completed on Dec. 31, 2022.

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