Chinese electric vehicle start up Nio announced a strategic partnership with Intel’s autonomous vehicle technology firm Mobileye to produce self-driving vehicle systems initially for China.

Nio’s share price jumped by over 40% to a high of US$2.46 on the US Nasdaq stock exchange earlier this week on the news, before falling back to just over US$2.

Shanghai based Nio confirmed it had agreed to “engineer and produce a self-drive system based on Level 4 autonomous driving technology developed by Mobileye” which Nio described as “the global leader in the development of vision technology for Advanced Driver Assistance Systems (ADAS) and autonomous driving”.

The company added “we will mass produce the system for Mobileye and also integrate the technology into our electric vehicle lines for consumer markets and for Mobileye’s driverless ride-hailing services”.

Nio confirmed plans to mass produce a variant of its system at a facility in China initially for consumer markets in China, with “plans to subsequently expand into other global markets”.

The company added “this self-driving system will be the first of its kind, targeting consumer autonomy, engineered to automotive qualification standards, quality, cost and scale”.

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This was the first positive news for many months, with headlines over the last year largely dominated by stories of huge financial losses, job cuts and sales falling way below the company’s targets. The company said its cumulative deliveries reached 26,215 vehicles by the end of October, including 14,867 in the first 10 months of 2019. 

Nio’s founder and CEO William Li said he “looks forward to building the company’s strategic collaboration with Mobileye in autonomous driving technology development, to further enhance the safety and capabilities of our vehicles, as we strive to be the next-generation car company and the best user enterprise”.

Amnon Shashua, Intel senior vice-president and CEO of Mobileye, said: “We are thrilled by the promise and potential of collaborating with Nio on electric autonomous vehicles, for both consumers and robotaxi fleets. We value the opportunity to bring greater road safety to China and other markets through our efforts and look forward to Nio’s support as Mobileye builds a transformational mobility service across the globe.”