Tech

Volvo plans to accelerate the transition to electric cars


announced Swedish luxury car maker Volvo, owned by China’s Geely, announced its initial public offering (IPO) plan as it seeks to raise more money to accelerate its transition to an all-electric car company.

The announcement follows news last week that Polestar, the electric car company that is a joint venture between Volvo and Geely, is going public through a merger with a special purpose acquisition company, or SPAC.

The deal values ​​Polestar at about $20 billion. And that’s despite only selling two models – a plug-in hybrid luxury coupe and an all-electric backlit sedan.

Volvo is opting for a more traditional route by going ahead with an initial public offering on the Nasdaq Stockholm stock exchange that could value the company at more than $25 billion.

The company said it aims to raise about 25 billion crowns, equivalent to 2.86 billion dollars, through the issuance of new shares. The goal is to use that money to accelerate plans to phase out the sale of petrol cars in its bid to become an electric-only car company by 2030.

It also marks a dramatic return to Volvo, which was sold at a huge loss to Geely by Ford for just $1.8 billion in 2010. After Ford bought the Swedish automaker for $6.5 billion in 1999.

Read also: Volvo delivers cars to Didi’s autonomous vehicle division

Volvo underwent a major expansion

Volvo launched its first fully electric car, the XC40 Recharge, last year. The SUV has a range of approximately 320 kilometers and can charge its batteries to 80 percent of capacity in 40 minutes. It is supposed to launch C40 Recharge later this year. The electric XC90 won’t be revealed until 2022.

The listing offers investors an opportunity to bet the auto industry will transition to all-electric vehicles at a time of rising concerns about exhaust emissions and a push by governments around the world to produce sluggish cars.

Geely, the largest privately owned automaker in China, is selling some of its Volvo shares as part of the IPO. Geely did not say how many shares the sale would affect the company’s total stake in the automaker.

But the Swedish company said that the Chinese company remains its largest shareholder after the deal. Its Swedish institutional shareholders, Folksam and AMF, also remain.

The news reinforces the range Volvo has come over the past 11 years. Since its purchase by Geely, Volvo has undergone a significant process of expansion. It has built two vehicle assembly facilities in China and a factory in South Carolina.

The Swedish automaker explained in a statement that its relationship with Geely allows it to benefit from sharing current and future technology. and coordinate procurement and economies of scale to achieve synergy, competitiveness and long-term value delivery.

Read also: Volvo and Aurora develop fully autonomous trucks

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