Volvo Offers Software To Rivals In Reversal From Coding Delays

Volvo Car AB is looking for partnerships for its new central software stack that'll run on all of its future electric models, a sign the carmaker has overcome earlier coding glitches that delayed vehicle launches and sparked recalls.

The manufacturer is open for pacts including licensing of the "superset" system that operates via a handful of high-performance computers, according to Volvo's Chief Engineering & Technology Officer Anders Bell. While a number of carmakers including Volkswagen AG have struggled to move to their own centralized software, those that have managed in-house can potentially tap new revenue streams.

"I am very open to collaborations in this area. The phones are on and the mailboxes are active," Bell said in an interview.

Carmakers, with a history of deep rivalries and spotty success on partnerships, have started to cooperate more on costly new technologies. This follows misses on developing in-house software systems, prompting model delays at the likes of VW and Stellantis NV.

VW last year turned to Rivian Automotive Inc. for a $5.8 billion technology tie-up for Western markets, after mounting setbacks in its Cariad software unit. It set up a similar venture for China with Xpeng Inc. Others, like Ford Motor Co., have scaled back projects that targeted architectures with centralized software functions.

While Volvo, based in Sweden and owned by China's Geely, is shopping its new code, geopolitics means pacts will be limited to partners outside of China, said Bell, who rejoined Volvo in 2022 after six years at Tesla Inc. In the US, regulators are also examining how Volvo's Chinese ownership intersects with data and cybersecurity rules.

Volvo suffered its own pitfalls in the shift from hardware maker into software with bruising delays of the EX90, the brand's flagship SUV: integrating a fully centralized software brain proved far more complex than anticipated, and customers reported a litany of errors. Bell said he's confident that Volvo's next EV, the mid-size EX60 to debut in January, won't have the EX90's problems.

"It has been an extremely big journey to become a software company, and unfortunately we had a spillover effect on customers in the early days of the EX90," Bell said.

The executive compared Volvo's transition to how Apple has built iOS or macOS, and how a central system is configured for successive iPhone or MacBook generations. "Which means: the bugs we solved once for the EX90 are already solved for the EX60."

Bell said he expected the broader industry to mirror moves by VW and Rivian, which are developing an EV and software platform they may sell to other carmakers in the future.

"It's a very interesting example of collaboration that may be unconventional, but it's completely in line with where I believe the development will go," Bell said about the initiative. "You can see carmakers that made big software bets, then went back and adjusted or found a collaboration."

Volvo is also open to sharing its new EV underpinnings, the SPA3 platform.

We're "completely open for business when it comes to collaboration," he said, citing the example of Ford licensing VW's EV platform for Europe. "You can absolutely create a unique customer experience on a technology platform that has been developed more generically."

Volvo's first vehicle made on the new architecture is the EX60, billed as the manufacturer's most important launch in decades. Sister brand Polestar will also produce cars on the platform and other brands owned by Volvo parent Zhejiang Geely Holding Group "may follow," Bell said.

While Volvo has resolved internal issues on software, it still needs to clear broader geopolitical hurdles that in a worst-case scenario could upset sales in the US.

The manufacturer is talking with the Commerce Department a proposed US ban on sales of vehicles that include software developed by Chinese-backed companies. The rules are set to take effect for the 2027 model year, and in a worst-case scenario could mean several Chinese-owned carmakers — including Geely-owned brands such as Polestar and Lotus — could face a sales ban.

Volvo Chief Executive Officer Hakan Samuelsson has repeatedly said he expects the issue to be resolved, though the US government shutdown that ended last month likely delayed the process, according to Bell.

"There is a distinct line between East and West that we have to relate to," Bell said. "Technically, we could open up our entire stack to the whole world. But legally, we cannot."

Source: Bloomberg Europe