Volvo IPO Announced: Is The Swedish Manufacturer Worth $25 Billion?

Volvo was the first auto-manufacturer to phase out exclusively internal combustion vehicles. As of 2019, Volvo only offers electric and electric-hybrid cars. As a result, the Swedish company is enjoying enhanced publicity and increased sales. Volvo’s owner, the China-based Geely Holding Group, is taking advantage of surging electric vehicle manufacturer valuations with a well-timed Volvo IPO. But will Volvo reach the rumored target of $25 billion?

Ford sold Volvo for $1.8 billion

Volvo unveils the XC40 Recharge at an auto show. The Volvo IPO is rumored to set the Swedish manufacturer's valuation at $25 billion, as its parent company attempts to ride the electric manufacturer wave. | FREDERIC J. BROWN/AFP via Getty Images
Volvo unveils the electric XC40 Recharge at an auto show. | FREDERIC J. BROWN/AFP via Getty Images

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During the 2008 recession, Ford Motor Company was losing money quickly. Therefore, the manufacturer sold off some of its overseas brands. Ford’s sale of Volvo to Zhejiang Geely Holding Group of China was finally official in 2010. Geely Holding paid just $1.8 billion. This is a fraction of the rumored valuation of the upcoming Volvo IPO.

For years, Volvo was still considered a niche brand that made boring, stodgy cars. For example, in the 1996 film, The Rock, Dr. Stanley Goodspeed (Nicholas Cage) wants to communicate he is an academic, not cut out for dangerous violence. He says, “I drive a Volvo, a beige one..cut me some friggin’ slack!”

In the past ten years, Volvo has completed one of the most incredible turnarounds in automotive history. 

How Volvo got its groove back

Volvo unveils the XC40 Recharge at an auto show. The Volvo IPO is rumored to set the Swedish manufacturer's valuation at $25 billion, as its parent company attempts to ride the electric manufacturer wave. | FREDERIC J. BROWN/AFP via Getty Images
Volvo unveils the electric XC40 Recharge at an auto show. | FREDERIC J. BROWN/AFP via Getty Images

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Since 2010, Geely Holding Group and Volvo pulled off a complete brand turnaround. First, Volvo began building a reputation based on its legendary safety ratings. Next, the company raised the bar with a suite of automated driver aids. Then, Volvo ran a series of ads highlighting the clever engineering of its most recent cars. Finally, the company rallied behind the slogan, “Engineered for life.”

The result of all Volvo’s work was the company successfully positioning itself as a new type of luxury brand. As a result, Volvo became the upmarket car for the discerning buyer: the perfect brand for the driver who demands quality but is not flashy.

The renewable energy revolution

A Volvo XC60 hybrid car is seen plugged into a charging point outside a Volvo dealership in England. The Volvo IPO is rumored to set the Swedish manufacturer's valuation at $25 billion, as its parent company attempts to ride the electric manufacturer wave. | BEN STANSALL/AFP via Getty Images
A Volvo XC60 hybrid car is seen plugged into a charging point outside a Volvo dealership in England. | BEN STANSALL/AFP via Getty Images

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As electric vehicles become increasingly viable, many automakers pledge to phase out internal combustion automobiles. But most automakers are not promising to cease all internal combustion production until 2035.

The electric vehicle revolution was an opportunity for Volvo to become an industry leader. Moreover, electrification is in line with Volvo’s engineering-forward brand. So it is not surprising that Volvo was the first car company to back up its electrification promises. 

Leading the electric vehicle charge, prime time for the Volvo IPO

Electric Volvo charging in an electric vehicle only spot in Britain. The Volvo IPO is rumored to set the Swedish manufacturer's valuation at $25 billion, as its parent company attempts to ride the electric vehicle wave. | TOLGA AKMEN/AFP via Getty Images
Electric Volvo charging in an electric vehicle only spot in Britain. | TOLGA AKMEN/AFP via Getty Images

In 2019, Volvo stopped building any internal-combustion-only cars. As a result, every Volvo made for the 2019 model year or later is hybrid-electric or fully electric. Volvo’s electric future is represented by cutting edge concepts such as the Volvo Recharge.

Volvo has found positioning itself as an industry leader lucrative. For the first two quarters of 2021, Volvo has enjoyed a 41% increase over its 2020 sales. While Europe remains Volvo’s most substantial market, its US sales are climbing dramatically. While Volvo’s worldwide sales rose 41% this year, its US sales soared 47%. In the first half of 2021, Volvo sold 380,757 vehicles.

Sources say Volvo has been considering an IPO since 2018. But with its current winning streak, the time for a Volvo IPO has finally arrived.

Volvo IPO: is it worth $25 billion?

This is the Volvo Logo on and XC90 in a Volvo showroom. The Volvo IPO is rumored to set the Swedish manufacturer's valuation at $25 billion, as its parent company attempts to ride the electric vehicle wave. | JONAS EKSTROMER/TT NEWS AGENCY/AFP via Getty Images
The logo of a Volvo XC 90. | JONAS EKSTROMER/TT NEWS AGENCY/AFP via Getty Images

Sources familiar with Volvo’s IPO plans told the Wall Street Journal that the Swedish Automaker will set a valuation as high as $25 billion. But is Volvo worth this much?

Volvo and Geely Holding Group jointly own Polestar, a Swedish electric vehicle manufacturer. Recently, Polestar went public via a merger with a special-purpose acquisition company. With Tesla valued at over $700 billion, it is no surprise that Polestar is currently worth $20 billion.

Geely Holding Group is attempting to position Volvo as another electric vehicle leader. Spokespeople have said Volvo is especially “well-positioned” to grow and profit with the electric vehicle revolution.

It is unclear exactly how much of the Volvo company Geely Holding Group will offer to the public. But the Journal’s source is confident Geely will maintain a controlling share of Volvo.

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