Volvo states shift to electrical cars and trucks is factor behind $2.9 billion IPO

Volvo says shift to electric cars is reason behind $2.9 billion IPO

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A Volvo C40 Recharge photographed in Stockholm, Sweden, on March 2, 2021.


The CEO of Volvo Cars has actually informed CNBC that the car manufacturer’s shift to electrical cars is the factor behind its organized listing on the Nasdaq Stockholm stock market.

The business wishes to raise 25 billion Swedish krona, or $2.9 billion, by means of the going public, which will be among the greatest in Europe this year.

In an interview with CNBC’s Julianna Tatelbaum Monday, Hakan Samuelsson was asked why the business was going public now.

“We have a very big interest from investors to invest into EV companies, you see that growing all the time,” he stated. “We have actually stated 2030 is our end date for [the] ICE [Internal combustion engine] engine and we obviously wish to protect that improvement.”

Samuelsson described that the shift to electrical cars was “not free of charge.”

“That’s why we are now speaking about [the] main releasing of brand-new shares in around 3 billion U.S. dollars … And that is actually to have the funds to protect this improvement in the next 5, 6 years. That’s actually … the factor for our ‘objective to drift’ message,” he included.

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This shift comes as significant economies likewise set out strategies to move far from the internal combustion engine.

The U.K., for instance, wishes to establish a net-zero transportation sector by 2050, stopping the sale of brand-new diesel and fuel cars and trucks and vans by2030 It will need, from 2035, all brand-new cars and trucks and vans to have absolutely no tailpipe emissions.

Elsewhere, the European Commission, the EU’s executive arm, is targeting a 100% decrease in CO2 emissions from cars and trucks and vans by 2035.

Chip obstacles

All the above modifications are happening while international vehicle producers continue to fight the effect of an international semiconductor lack.

On Tuesday, figures launched by the Society of Motor Manufacturers and Traders revealed that 215,312 cars and trucks were signed up in the U.K. throughout September2021 This represents a decrease of 34.4% compared to the very same month in 2020, with the SMMT explaining it as the “weakest September since 1998.”

In a declaration, the market body stated the “ongoing shortage of semiconductors” had actually affected lorry accessibility.

The SMMT likewise kept in mind, nevertheless, that “September was the best month ever for new battery electric vehicle (BEV) uptake.”

“With a market share of 15.2%, 32,721 BEVs joined the road in the month, reflecting the wide range of models now available and growing consumer appetite,” the SMMT stated. The very popular vehicle for the U.K. market in September 2021 was the Tesla Model 3.