Sweden’s Volvo Motors and China’s Geely Auto have shuttered plans to merge companies, but will increase joint efforts electric vehicle technologies to boost sales, it was announced in a company statement on Wednesday.
The merger was announced in February last year in a bid to publicly list the Swedish automaker, but plans were halted after Geely Auto, who owns both firms and is listed on the Hong Kong Stock Exchange (HKEX), launched an additional listing on the Shanghai Stock Exchange, blocking the merger from taking place, Reuters reported.
Further plans were announced to build new electric vehicle architectures for the Chinese auto giant’s brand family, which include the United Kingdom’s Lotus, Sweden’s Volvo and Polestar, Malaysia’s Proton as well as the jointly-owned Lynk & Co.
The new agreement would allow Geely Auto to “accelerate its global expansion” in China and “develop a new generation of world-class energy vehicles”, An Conghui, president and chief executive of Geely Auto said in a statement.
Li Shufu, chairman of Geely Holding, welcomed the agreement, stating the firm saw “significant benefits from deeper partnerships and alliances” while maintaining an independent corporate structure.
“We are encouraged by the potential synergies and growth opportunities created by this collaboration, which will create two even stronger globally competitive companies in the rapidly changing world of automotive technology,” he added.
The news comes after Geely Holdings teamed up with Chinese tech giant Tencent Holdings to launch new connected cars.
Rivalry in the world largest auto market has grown between US automaker Tesla Motors and Germany’s BMW and Volkswagen Group, namely after the former began producing V3 superchargers at its Gigafactory 3 in Shanghai.
Roughly 10,000 of Tesla’s rapid-charging stations will be built a year to facilitate China’s national EV ambitions by 2025.
The Volkswagen Group pledged €15bn and inked joint ventures with Chinese auto firms SAIC, FAW and JAC in September last year to facilitate global green energy initiatives, with hopes to increase output to 600,000 EVs a year.