Uber is Ordering 24,000 Autonomous Cars

A deal to bring autonomous cars into the mainstream has just been brokered.

Volvo Cars has announced that they will supply Uber with a fleet of up to 24,000 self-driving taxis by the end of 2021, beginning in 2019. This marks one of the most significant investments in autonomous cars in history and a continued dedication by Uber that the technology is their ticket to staying competitive.

The deal came through today as a basic blueprint without any real financial terms discussed. The cars provided will be what Volvo Cars CEO Hakan Samuelsson described as a “base car,” a model based on the company’s popular XC90. It is an SUV that seats up to seven people and is priced at just below $47,000 per car for U.S. markets. The base cars have all necessary safety, redundancy and core technologies required for Uber to add its own self-driving technology.

An order of this magnitude would represent around 4.5 per cent of Volvo’s total 2016 sales. If the car maker is selling the SUV for the list price, the total order would come in at around $1.13 billion. With that said, that calculation doesn’t account for fluctuations for wholesaling and the different add-ons Uber may opt-in for each car, but it’s safe to say the final number will be over a billion dollars.

“We’re thrilled to expand our partnership with Volvo,” said Jeff Miller, head of auto alliances at Uber. “This new agreement puts us on a path towards mass-produced self-driving vehicles at scale.”

There is still a lot of work to be done in terms of making a car fully autonomous, but this investment shows Uber is all-in when it comes to getting self-driving vehicles on the road in a matter of years, and not decades. There are five levels of self-driving cars, with the safest and most futuristic being level five. No companies have achieved that highest level yet, but businesses including Intel and Magna have hit level four just this year.

Volvo and Uber have worked together on self-driving cars in the past, as the ridesharing company’s first autonomous car rolled out in Pittsburgh last year. That partnership stemmed from a $300 million deal to put self-driving cars on the road by 2021, an agreement that now seems within reach after today’s announcement.

The autonomous driving technology has seen some criticism though, as an Uber self-driving car with two employee passengers crashed and flipped over earlier this year. While the employees were relatively unharmed and the accident wasn’t the fault of the self-driving car, both policymakers and the public jumped at the chance to say the technology isn’t close to being road ready.

The race to put self-driving cars on the road first is extremely competitive and includes some of the biggest names in technology. Apple is building self-driving campus shuttles, while the Google-owned Waymo launched a truly autonomous pilot project earlier this month.