Their ultimate goal is to create and sell Level 4 autonomous vehicles -- those that don't need a human driver at all -- but it's unclear if they're also releasing semi-autonomous models before they achieve that. At this point in time, Baidu's Apollo is already capable of driving in basic urban environments, even at night.

By investing time and money in autonomous vehicles, the partners are making sure that they're getting a piece of what could become a massive market in the Asian country. London-based analyst IHS Marking believes that around 14.5 million autonomous cars will be sold in China by 2040.

Håkan Samuelsson, president and chief executive of Volvo Cars, said in a statement: