Shares of Veoneer (NYSE:VNE) are soaring 18% in morning trading Thursday after the automotive tech company announced a partnership with Qualcomm (NASDAQ:QCOM) to develop integrated software and systems on a chip for advanced driver assistance and autonomous driving vehicle platforms.
The partnership could represent a leap forward for its advanced driver assistance systems (ADAS) as the auto industry suffered major setbacks during the pandemic. Veoneer also ended a joint venture with Volvo Group in April that saw them divvy up Zenuity, the joint venture that sought to develop and commercialize ADAS software. The two companies each took separate components of Zenuity to pursue on their own.
While the announcement is hopeful for Veoneer, it doesn't amount to much yet. The auto tech specialist merely said it had signed a non-binding letter of intent and expects to finalize a definitive agreement by the end of the year.
Veoneer estimates more than 90% of its available market will be for ADAS in the next decade. It supplies carmakers Ford Motor and Honda Motor, among others. It anticipates the systems developed with Qualcomm to be available for 2024 vehicle production.