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

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

CLAUDIO BRESCIANI | AFP | Getty Photographs

The CEO of Volvo Automobiles has instructed CNBC that the automaker’s shift to electrical cars is the rationale behind its prepared listing on the Nasdaq Stockholm inventory exchange.

The organization needs to increase 25 billion Swedish krona, or $2.9 billion, through the original community presenting, which will be a single of the greatest in Europe this year.

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

“We have a quite big fascination from traders to devote into EV firms, you see that increasing all the time,” he stated. “We have claimed 2030 is our conclude day for [the] ICE [Internal combustion engine] engine and we of class want to safe that transformation.”

Samuelsson defined that the shift to electric motor vehicles was “not free of demand.”

“That is why we are now conversing about [the] main issuing of new shares in all over 3 billion U.S. dollars … And that is actually to have the monetary methods to protected this transformation in the up coming five, six decades. That’s actually … the motive for our ‘intention to float’ message,” he additional.

Read through extra about electric powered autos from CNBC Professional

This changeover will come as significant economies also lay out programs to move away from the interior combustion engine.

The U.K., for case in point, would like to establish a net-zero transport sector by 2050, stopping the sale of new diesel and petrol autos and vans by 2030. It will need, from 2035, all new cars and trucks and vans to have zero tailpipe emissions.

Elsewhere, the European Fee, the EU’s government arm, is targeting a 100% reduction in CO2 emissions from vehicles and vans by 2035.

Chip difficulties

All the earlier mentioned changes are using area even though global vehicle suppliers continue on to battle the effects of a world semiconductor lack.

On Tuesday, figures produced by the Modern society of Motor Brands and Traders showed that 215,312 automobiles had been registered in the U.K. for the duration of September 2021. This signifies a decrease of 34.4% compared to the very same month in 2020, with the SMMT describing it as the “weakest September considering the fact that 1998.”

In a statement, the field entire body explained the “ongoing shortage of semiconductors” experienced impacted automobile availability. 

The SMMT also mentioned, on the other hand, that “September was the finest month ever for new battery electric powered automobile (BEV) uptake.”

“With a industry share of 15.2%, 32,721 BEVs joined the road in the month, reflecting the wide variety of versions now accessible and expanding consumer hunger,” the SMMT stated.  The very best-advertising car for the U.K. sector in September 2021 was the Tesla Design 3.