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Volvo announces plans to go public in bid to accelerate shift to electric cars

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The Swedish automaker has said it would be an EV-only company by 2030

Photo by Andrew Hawkins / The Verge

Volvo, the Swedish luxury car maker owned by China’s Geely, announced its plan for an initial public offering as it seeks to raise more cash to accelerate its transition to a fully electric car company.

The announcement follows the news last week that Polestar, the electric car company that is a joint venture between Volvo and Geely, would be going public by merging with a special purpose acquisition company, or SPAC. That deal values Polestar at roughly $20 billion, despite selling only two models — a hybrid luxury coupe and an all-electric fastback sedan. Volvo is choosing a more traditional route by proceeding with an IPO in Stockholm that could value the company at upwards of $25 billion.

Volvo said it aims to raise about 25 billion kronor, equivalent to $2.86 billion, by issuing new shares. The aim is to use this money to speed up plans to phase out the sale of gas-powered cars in its bid to become an EV-only company by 2030. It also represents a dramatic comeback for Volvo, which was sold to Geely by a beleaguered Ford for just $1.8 billion in 2010.

Volvo launched its first fully electric car, the XC40 Recharge, last year. The SUV has a roughly 200-mile range and can charge its batteries to 80 percent capacity in 40 minutes. In our time with the car, we found it to be an “impressive blend of Swedish ingenuity, crossover utility, and electric performance. The follow-up, the C40 Recharge, will be available later this year, while an electric XC90 SUV won’t be revealed until 2022.

The listing would offer investors a chance to bet on the auto industry’s transition to fully electric vehicles at a time of rising concerns about tailpipe emissions and a crackdown by governments around the world on the production of gas cars.

Geely, which is the largest privately owned automaker in China, will sell some of its shares in Volvo as part of the IPO, though it hasn’t said how many nor how it could affect the company’s overall stake in the automaker. Earlier this year, the company backed off a plan to fully merge Volvo with Geely’s auto division.