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Volvo’s planned IPO is all about the transition to electric vehicles

  • Volvo plans to go public on Nasdaq in Stockholm with the aim of raising $ 2.86 billion through the sale of shares.
  • The automaker plans to be 50% of its product range battery-electric by 2025 and 100% battery-electric by 2030.
  • Volvo’s all-electric Polestar sub-brand recently announced plans for a SPAC listing on Gores Guggenheim, which is targeting a valuation of approximately $ 20 billion.

    Just days after Volvo’s former in-house tuner and current electronics sub-brand Polestar announced that it would go public via a SPAC with an expected value of US $ 20 billion, the Swedish brand is planning its own listing. The automaker has been majority-owned by China’s Geely since it left Ford’s Premier Automotive Group (PAG) about a decade ago, which included Jaguar and Aston Martin at the time. Geely bought Volvo for just $ 1.8 billion at the time.

    The planned Nasdaq listing in Stockholm is directly aimed at transforming Volvo into an EV manufacturer, with plans currently to discontinue internal combustion engines by 2030. However, the company has no plans to be listed in the United States.

    “Cars with internal combustion engines have no long-term future,” said Henrik Green, the automaker’s chief technology officer earlier this year. “We are determined to become an all-electric car manufacturer and the transition should take place by 2030. This enables us to meet the expectations of our customers and be part of the solution in the fight against climate change. “

    Volvo’s goals with the proposed listing in Sweden are far more limited than Polestars SPAC’s, with the automaker aiming to raise only about $ 2.9 billion through the listing. But that amount should still help him launch new EV platforms later in the decade, following the first and second electric models, the latest of which will hit the market in a few weeks.

    It has not escaped the notice of industry watchers that $ 2.9 billion alone will not be the deciding factor in Volvo’s transition to an all-electric vehicle range.

    Next year, an EV version of the XC90 SUV will be part of Volvo’s current electric offering, including the XC40 Recharge (above).

    Volvo

    “Volvo’s commitment to an all-electric line of products by the end of this decade is likely to be achievable without this recent IPO, but opening it up to outside investors will only streamline that now,” Robby DeGraff, industry analyst at AutoPacific told Autoweek. “As we’ve seen over the past few years, there are a lot of people who want to spend their money on companies that put the longevity of our planet first show a bright future only with electric vehicles. “

    Volvo intends to make 50% of its global sales battery electric by 2025. This means that more electric vehicles will be joining the XC40 Recharge and C40 Recharge soon, with an electric version of the XC90 SUV expected next year before electric vehicles are added to the lineup in other segments, including sedans.

    It’s worth noting that sedans of all sizes are segments that Volvo has largely left to other brands within Geely while staying away from large, battery-electric luxury sedans, a segment currently oversupplied. The Polestar 2 is a mid-size sedan geared towards the Tesla Model 3, while the Polestar 5 will target the Mercedes EQS when it hits the market in a few years.

    So Volvo is sure to have its electrical sub-brand fill in some blank spaces in an all-electrical range where Polestars SPAC move should prove very significant in the years to come.

    “The shift has already started with Volvo’s numerous plug-in hybrids and the all-electric XC40 and C40 Recharge, but there is still a long way to go and there is still a lot to be done,” added DeGraff. “The IPO should give Volvo $ 2.86 billion that can be used for important research and development necessary to introduce other EV versions of the brand’s bestsellers such as the XC60 and three-row XC90 . Not to mention, with the brand’s domestic assembly plant here in South Carolina to boost production of electric vehicles, this IPO should help with those preps as well. “

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