Details have begun to leak.
Before selling Volvo to Chinese automaker Geely in 2010 for $1.8 billion, Ford invested billions into the Swedish brand known for its decades-long focus on vehicle safety. Some Ford executives probably regret the decision to sell because Volvo is now thriving. SUVs like the Volvo XC40 are selling in high numbers and the all-electric variant, the XC40 Recharge, is just now arriving in dealerships.
Volvo has committed itself to become an all-electric brand by 2030, joining the ranks of Jaguar, General Motors, and Ford of Europe. The success tempted Geely to consider a possible merger between it and Volvo, but this was ruled out last month. Instead, the decision was made to combine the companies' powertrain operations into a single entity and expand technology cooperation. There have also been rumors of a possible Volvo IPO.
According to Bloomberg, Geely Holding Group has very quietly been discussing a potential plan for a Volvo IPO as soon as this year. With an estimated value of $20 billion, Volvo could serve Geely's long-term interests extremely well as a publicly-traded company. Like other automakers, Geely is searching for ways to fund the extremely expensive shift to EVs and autonomous driving. Bloomberg points out companies have raised $220 billion globally this year alone from IPOs.
Last year, Volvo sold more than 660,000 passenger vehicles with China being its best market, followed by the US and Europe. There are even plans to spin-off Polestar, the all-electric brand jointly owned by Volvo and Geely, sometime later this year as well.
This isn't the first time a Volvo IPO has been seriously considered. Back in 2018, Geely dropped plans to publicly list Volvo with a $30 billion valuation after investors made clear they were not in favor of the move. But things have changed in the last three years.
The pandemic has spurred automakers to pursue electrification at a faster rate, and Geely happens to have two highly desirable global brands under its wing. Why not make the most of them financially? Neither Volvo nor Geely directly responded to the report, but we'll surely be hearing more about this subject in the coming weeks.