Volvo Cars is planning to set up a new technology company with Geely Holding to share existing and future technology, deepen industrial synergies and provide the economies of scale that will allow them to more rapidly develop next generation electrified vehicle technology. According to a memorandum of understanding signed this week, Volvo Cars, Geely Auto and Lynk & Co will share vehicle architecture and engine technologies via cross-licensing arrangements of technologies managed by the new joint venture.

Volvo Cars, Geely Auto and LYNK & CO are managed by Geely Holding. The new joint venture will be co-owned by Volvo Cars and Geely Holding and will be headquartered in China with a subsidiary in Gothenburg, Sweden. Volvo Cars and Geely already share technology, most notably the Compact Modular Architecture platform that is being used by Volvo Cars for its soon-to-be-announced smaller range of 40 series cars and by Lynk & Co.

The intellectual property rights for the technology to be shared will remain with the company that developed it, but the technology itself will be available for use by Volvo, Geely Auto and Lynk & Co via licence agreements. Future modular vehicle architectures and other technology will be shared and developed based on cost-sharing agreements. The company leading the development will own the technology and the other group companies will have full access to it through a licence, reducing overall development costs.