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

Volvo Cars CEO told CNBC that the shift of automakers to electric vehicles is why they plan to list on the Nasdaq Stockholm Stock Exchange.

The company hopes to raise SEK 25 billion ($ 2.9 billion) through its initial public offering, which will be one of the largest in Europe this year.

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

“We are very interested in investing in EV companies from investors. You will see it growing all the time,” he said. “We said 2030 is our end date [the] ice [Internal combustion engine] The engine and we, of course, want to ensure that transformation. “

Samuelson explained that the move to electric vehicles is “not free.”

“That’s why we’re talking now [the] Primary issuance of new shares for about US $ 3 billion … and that’s actually having the financial resources to ensure this transformation in the next five to six years. That’s really … the reason for our “floating intent” message, “he added.

This transition occurs because major economies are also planning to move away from internal combustion engines.

For example, the UK wants to develop a net-zero transportation sector by 2050 and stop selling new diesel, petrol and vans by 2030. After 2035, tailpipe emissions for all new cars and vans should be zero.

Elsewhere, the European Commission, the EU’s executive body, aims to reduce CO2 emissions from cars and vans by 100% by 2035.

Chip challenges

All of the above changes are happening as the world’s automakers continue to fight the effects of the global semiconductor shortage.

Numbers released by the Association of Automakers on Tuesday showed that 215,312 vehicles were registered in the UK in September 2021. This represents a 34.4% decrease compared to the same month in 2020, which SMMT describes as the “weakest” from 1998 to September. “

In a statement, industry groups said the “continuous shortage of semiconductors” had an impact on vehicle availability.

However, SMMT also states that “September was the best month ever for the adoption of new battery-powered electric vehicles (BEVs).”

“With a 15.2% market share, 32,721 BEVs were launched in the month, reflecting the wide range of models currently available and the growing consumer demand,” said SMMT. The best-selling car on the UK market in September 2021 was the Tesla Model 3.