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Geely Auto, Volvo Cars Nix Merger

A Geely Auto and Volvo Cars merger has been called off a year after its announcement.

The two companies have in the interim decided that sharing tech was more beneficial than a full blending of the two cultures.

“We have learned that traditional hardware synergies are not as important as maintaining speed on the top line.”

Volvo chief executive Hakan Samuelsson

The chief factor in the decision was based in getting electric vehicles (EVs) designed, built and to market quickly, as Tesla has exploded to a substantial lead in EVs in the last decade. The inevitable back-and-forth of agreement on requirements and design of components with two end users in mind was deemed too dangerous now that the EV market is in high gear.

Volvo chief executive Hakan Samuelsson said a full combination of the companies would have “slowed down” the businesses as they race to develop electric vehicles and self-driving systems. “We really would like to avoid any type of loss of momentum when people start to talk more about internal power issues,” he said.

Catching Up With The Car-dash-ians

The EV market today is dominated by California-based Tesla, while the field of competitors is pouring money into research, design and development. Traditional automobile companies like General Motors, Ford, Toyota and Volkswagen Group are working at a furious pace to catch up to Tesla, while new, all-EV companies like Nio (China), Fisker (US) and Lucid (US) charge ahead, armed with design talent and new patents.

EV growth

Read a great WSJ piece about the crowded, moneyed field of Tesla challengers.

Volvo’s EV Plans

While Volvo’s year-old XC 40 Recharge model is reportedly selling well, a rounded class of EVs would include at the very least a sedan, a wagon, and a full-size SUV, in addition to the small XC 40.

Volvo’s heady EV plans include boosting its EV sales to half of its total sales in just four years, and to 100% of its sales by the end of the 2020s, according to Samuelsson.

In that light, it’s not hard to see why merging with a primarily Chinese-market, non-luxury car maker — rather than a more nimble and simpler tech sharing set up — would be a brake on these ambitious goals.

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