STOCKHOLM, June 19 (Reuters) - China's Geely has picked Zenuity, a joint venture between its Volvo car marque and Swedish technology group Veoneer , as its preferred supplier for assisted and self driving software.
Regulatory and technological challenges as well as soaring development costs mean carmakers have delayed forecasts for the mass adoption of self-driving cars and the Geely deal is a welcome boost for Zenuity.
It said on Wednesday that the deal would encompass Geely's range of car brands, which include Geely Auto, performance brand Polestar, subscription-based electric carmaker Lynk & Co and British sports car maker Lotus.
Sweden's Veoneer said earlier this year it was conducting a review and seeking new efficiency measures at Zenuity, as well as raising cash to shore up its working capital.
Zenuity, whose customers include Volvo and Geely Auto, employs more than 600 people and in January won an approval to begin hands-free testing of its software for self-driving Volvos on Swedish highways.
It is competing with larger rivals in self-driving technology, where U.S. companies are leading the way, with Google's Waymo last year winning the first approval to test cars without safety drivers on Californian roads.
Gothenburg-based Zenuity was formed in 2017 by Volvo, which Geely bought from Ford in 2010, and Autoliv, the former parent of Veoneer which then made a 1.1 billion Swedish crown ($115 million) capital injection in the venture. ($1 = 9.5422 Swedish crowns) (Reporting by Esha Vaish in Stockholm; Editing by Johannes Hellstrom and Alexander Smith)