Volvo Cars to hit the stock market end of 2021

The Chinese car company Geely wants to list its Swedish passenger car subsidiary Volvo Cars on the Stockholm stock exchange before the end of this year. New shares are expected to raise gross proceeds of around 25 billion Swedish kronor (2.5 billion euros). Geely wants to remain the largest shareholder.

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It is still only a declaration of intent and thus not yet a binding decision – but Geely’s intention is clear and had already become apparent. Officially, however, there is no more precise timetable or even procedure for the IPO in Stockholm. Volvo Cars’ investor communication states that the planned IPO “is expected to consist of the issuance of new shares by Volvo Cars to raise gross proceeds of approximately SEK 25 billion and a possible partial sale of shares by Volvo Cars’ major shareholder”.

However, Geely intends to remain the main shareholder, and current Swedish institutional shareholders AMF and Folksam also intend to remain invested in the company, according to Volvo. Currently, AMF and Folksam hold 2.2 per cent of the shares.

Volvo sees itself as one of the world’s fastest growing premium car companies in terms of sales and revenue, with the Swedes setting new records for both of these metrics in the first half of the year. The company has set itself the goal of generating half of its sales with pure e-cars by 2025, and from 2030 Volvo wants to become a pure electric car manufacturer.

The IPO will now serve to finance this transformation towards electrification, sustainability and digitalisation – via access to Swedish and international capital markets to diversify Volvo Cars’ ownership base. “As a listed company, Volvo Cars will enable global institutional and retail investors to participate in the next phase of the company’s value creation once the IPO is completed,” Volvo writes in the statement.

“We have supported the transformation and growth of this legendary Swedish brand at a time of unprecedented change in our industry,” said Eric Li, Chairman of the Board of Directors of Volvo Cars. “We will continue to support Volvo Cars as a majority shareholder in this ongoing global success story.”

Håkan Samuelsson, CEO of Volvo Cars, added in the release, “The decision to go public will help strengthen our brand and accelerate our transformation strategy – towards full electrification, direct customer relationships and the next level of safety. This will enable the company to deliver continuously growing volumes, revenues and profitability.”

Speaking to journalists, Samuelsson was a little more specific. Volvo Cars is expected to bring in the funds for major investments in new models and, in particular, in its own development and production of batteries, Samuelsson said. The battery joint venture with Northvolt, however, is to be continued.

On models, Samuelsson announced that they will also offer an electric car below the XC40. “Premium cars can clearly also be smaller cars. And electric cars will basically be a bit smaller,” the CEO said. This is not the first time Volvo has talked about smaller models: Samuelsson had already hinted in 2020 that such a vehicle – probably called XC20 or XC30 – would be based on Geely’s SEA platform.

Update 30 October 2021

Volvo Cars has completed its announced IPO. The carmaker’s shares rose by over 20 per cent at its stock market debut in Stockholm on Friday, giving Volvo Cars a market value of around 15.5 billion euros. The fresh money will be used to push ahead with the company’s transformation into an all-electric car supplier. As reported, Volvo’s electric car brand Polestar is also planning to go public – in the case of Polestar, the listing on Nasdaq is to take place via a SPAC merger.

Volvo Cars Chief Executive Håkan Samuelsson said the listing showed a recognition of its transition plans, adding it would be key for Volvo to demonstrate it is on track to be the “fastest transformer”. “There’s a much bigger interest in the market to invest in electric car makers than in the conventional ones. So we better do what we said we would,” explained Samuelsson.

volvocars.com (IPO), automobilwoche.de (statement by Samuelsson in German), reuters.com (update)