Volvo announced on Wednesday that it sold a 15% stake in its Zenseact self-driving technology division to Ecarx, a Chinese automotive technology company founded in 2016 by Eric Li, chairman and founder of Volvo parent Geely.

Ecarx is primarily focused on in-car technology, particularly connectivity, and only in March it established a joint venture with Volvo to oversee development of infotainment systems to be used by all Geely brands.

Ecarx will now work with Zenseact to expand into self-driving technology in the Chinese market, by installing Zenseact technology in vehicles from Geely brands outside of Volvo and Polestar. Previously only the two Swedish brands were earmarked to use Zenseact technology.

Zenseact's first products will include semi-autonomous driver-assist features and a full self-driving for highways. They are expected to debut on the redesigned Volvo XC90 due in 2022.

“Zenseact is a pioneer in self-driving technology, and this strategic investment from Ecarx enables us to scale up quicker in China,” Hakan Samuelsson, Volvo's CEO, said in statement.

Volvo and Geely have ruled out a full merger, but the two automakers plan to deepen their collaboration efforts in the future. In addition to the dealings with Ecarx, Volvo only last week announced it would form a joint venture with Geely to oversee all operations related to internal-combustion engines.

Volvo and Geely originally considered a merger as a means to boost their capital raising efforts, but Volvo is now more likely to launch an initial public offering to raise capital.