Volvo Car Group, owned by Zhejiang Geely Holding Group, is partnering with Alphabet's autonomous driving unit Waymo to develop highly automated electric robotaxis for the Swedish carmaker as well as its affiliate Polestar and Chinese joint venture Lynk& Co.

The two companies announced on Thursday that Waymo will be the exclusive Level 4 partner for Volvo. According to the SAE International, Level 4 technology enables drivers to have their minds off their vehicles.

In a statement, Volvo said the companies will first work together to integrate Waymo's fully self-driving technology, the Waymo Driver, into an all-new mobility-focused electric vehicle platform for ride-hailing services.

"Fully autonomous vehicles have the potential to improve road safety to previously unseen levels and to revolutionize the way people live, work and travel," said Henrik Green, Volvo's chief technology officer.

The two offered few details, but Green said the global partnership with Waymo opens up new business opportunities for Volvo Cars, Polestar and Lynk& Co.

The move has made Lynk& Co, a brand co-owned by Geely and Volvo, the first Chinese carmaker to partner with Waymo, which is believed to be a globally leading player in autonomous driving. Autonomous driving is gaining momentum in China, where people are more optimistic about the technology than in developed countries like the US and Germany.

According to the Securities Daily, around 30 companies in the autonomous driving sector has raised 9 billion yuan so far this year, including $500 million Didi received from Softbank and $462 million Pony.ai raised from Toyota.

Didi launched a test robotaxi service in a Shanghai suburb on Saturday after installing Vehicle-to-Everything hardware throughout the area. Under the test, customers within a designated area will be able to hire free on-demand rides using Didi's autonomous vehicles, which currently also have safety drivers, the company said.

V2X enables the exchange of information between vehicles, pedestrians and roadside communications infrastructure with the primary goals of improving road safety and making traffic flow more efficiently.

Didi has installed equipment at major junctions within the test area to minimize safety blind spots and coordinate communication among its fleet, it said.

The equipment will mainly be used by Didi's own cars, although cars operated by other autonomous driving companies could also link up to the system, according to Meng Xing, the chief operating officer of Didi's autonomous driving unit.

Analysts said V2X is differentiating autonomous driving in China from the technology overseas, which usually relies more on the vehicle itself. International carmakers including Audi are testing the technology in pilot zones in China.

Analysts said China's progress in 5G, which enables a much faster data transmission speed, will give a helping hand in facilitating the development of autonomous driving technology in the country.

Statistics from the Ministry of Industry and Information Technology show that China Mobile, China Unicom and China Telecom－which together serve 1.6 billion mobile subscribers in the country－built nearly 200,000 5G base stations by the end of March out of an annual target of 500,000.

Yet it will take some time for autonomous driving to be a regular part of daily life. Didi CEO Cheng Wei said the company expected greater use of artificial intelligence but it would take at least a decade of continued investment before autonomous driving technology passed critical technology, business and regulatory milestones.