Volvo Cars has confirmed months of speculation by announcing that it’s planning to go public on NASDAQ Stockholm. On Monday, the automaker stated that it would be seeking to raise 25 billion Swedish kronor (nearly $2.9 billion USD) via the selling of new shares as a way to fast-track its electrification plans. Those include ensuring half its annual volume being represented by EVs and transitioning the majority of its sales stemming from online orders by 2025.
While the targeted IPO valuation is unknown, prior information coming from Zhejiang Geely Holding Group (Volvo’s Chinese parent company) suggested it was aiming for something in the neighborhood of $20 billion. We’ve also learned that the collaboratively owned Polestar would also be going public, except it will be using the always sketchy special-purpose-acquisition-company merger to help pump the stock.
Volvo Cars is plotting to buy out parent company Zhejiang Geely Holding and free itself of its Chinese joint venture. The Swedish (currently Swedish-Chinese) manufacturer has been hinting at the prospect of going public with an IPO, which most analysts believe would be bolstered by creating some distance from Geely.
While the Chinese Communist Party has ended mandates requiring electric vehicle firms from entering into joint ventures with established domestic businesses, the rule still exists for traditional automakers. However, the general assumption is that most will attempt to regain full ownership of their Chinese assets when the law is lifted next year. But critics are cautioning that the nation is under no obligation to maintain any commitment to foreign entities once they’ve split with their local partners.
Volvo-owned Polestar has announced that its upcoming “performance SUV” will be manufactured within the United States, starting late in 2022. The model will be assembled alongside other Volvo products at the Swedish company’s facility in South Carolina. It also provides an opportunity for Chinese parent Zhejiang Geely Holdings to make meaningful moves on the North American marketplace and less ammunition for critics to reference the EV-focused Polestar as a foreign brand.
“Polestar 3 will be built in America, for our American customers,” said Polestar CEO Thomas Ingenlath. “I remember the great response when I first shared Polestar’s vision here in the USA and I am proud that our first SUV will be manufactured in South Carolina. From now on, the USA is no longer an export market but a home market.”
Lotus Cars has announced that the Emira sports car will be its next and final internal combustion model as it prepares itself to become an exclusively electric brand. The historically British manufacturer says its Chinese owners, the Zhejiang Geely Holding Group, are preparing a cash injection of $2.8 billion to swap to EVs and expand its footprint.
While the present market makes those items feel as though they could conflict with each other, Lotus thinks that the climate will be different a few years from now and plans on going EV only by 2028. In the meantime, the Emira is scheduled to launch in July.
American automakers can usually count on selling just below 3 million vehicle sales in China every year. While that figure includes the caveat that the Chinese Communist Party requires foreign manufacturers to partner up with established local companies, it remains substantially larger than the number of cars Chinese brands manage to move in the United States per annum — which is effectively zero.
From BYD to Zoyte, just about every large Chinese manufacturer has issued a deluge of promises about breaking into our market over the last decade — including most of the names we’ll be mentioning below. Consider this sort of the “Where Are They Now?” of evergreen automotive content about regional disparities. Because very little has moved in regard to China’s involvement with the North American auto market and the current geopolitical climate doesn’t make us think that’s likely to change anytime soon.
But it hasn’t been for a lack of trying.
Geely Auto Group has announced the formation of an electric technology firm and automotive brand called Zeekr Company Limited. With the Chinese group already holding numerous mobility-focused brands with a penchant for electrification, it’s a bit curious to see it launching another one. But Geely has indicated that Zeekr will be aimed at the premium EV market using a similar business model as Lynk & Co.
That likely means selling vehicles as a service, rather than a product owned by the driver — something we’ve been incredibly wary of since the industry starting mulling over things like subscription services and online sales. Owned jointly owned by Geely Automobile Holdings and Zhejiang Geely Holding Group, the plan is to start launching products in China before the end of 2021. It’s quite the swift turnaround, leading us to believe there will be some platform sharing with other Geely-owned automotive brands. New product is said to be introduced every twelve months over the next five years.
Despite having already having Volvo Cars as one of its many subsidiaries, China’s Geely signaled roughly a year ago that it wanted to merge with the brand as part of its strategy to expand globally. Plans changed on this week when the company announced that the duo will be retaining their independent corporate structures, though they will continue working on a joint development program for electric vehicles.
This means more backing for the Lynk & Co. brand, a technology-focused joint venture Geely launched with Volvo in 2016. Lynk is hoping to bridge the gap between traditional vehicle sales and subscription-based models, while also pioneering telematics and other connected services that look like an invasion of privacy to some and a technological breakthrough to others. Regardless, the industry as a whole seems convinced this represents the evolution of the automobile and a stable source of revenue for companies capable of monetizing large amounts of data — often with the help of the world’s largest technology firms.
Volvo Cars’ chief executive, Håkan Samuelsson, believes a ban on gasoline-driven vehicles would be a more effective way to force groups to go electric than continuing to offer subsidies on battery-powered automobiles. The announcement comes as part of the Financial Times’ “Future of the Car Summit,” where Samuelsson will proclaim the internal combustion engine “a technology of the past.”
In related news, Volvo Cars is also in negotiations to merge with China’s Geely Automotive and has renewed its commitment toward becoming an electric-only brand by 2030. The latter issue will also be brought up during Wednesday’s Car Summit, with the CEO praising the United Kingdom’s promise to eliminate the sale of new gasoline and diesel cars that same year.
What miraculously convenient timing.
China’s Geely Automobile Holdings reported a first-half net profit drop of 43 percent on Monday, a tumble that forced it to reduce end-of-year targets. As you may have expected, the coronavirus was named as the biggest obstacle it had to overcome, especially in its home country. That left Geely (parent to Volvo, Lotus, Proton, Lynk & Co, Emerald Automotive, London EV and more) revising 2020 volume estimates by 6 percent to 1.32 million vehicles against the 1.36 million deliveries it enjoyed through 2019.
While enduring a bad financial year in 2020 is hardly breaking news for any major automotive manufacturer, Geely is one of many Chinese firms with global aspirations. Its role as Daimler’s second-largest stakeholder and ownership of Volvo Cars (with which it is planning a full merger) arguably makes it the corporation that’s closest to achieving that goal, too. Yet the current economic and geopolitical situation served to undermine its ultimate goal of becoming Asia’s answer to Volkswagen Group.
China’s Zhejiang Geely Holding Group has its fingers in a lot of pies. Having purchased Volvo Cars from Ford a decade ago for $1.8 billion (a fraction of the price the Blue Oval paid), the brand has focused on scooping up troubled brands with global appeal or creating its own. In 2017, Geely purchased majority stakes in Malaysia-based Proton and UK-based Lotus Cars while attempting to turn its own Lynk & Co into a global brand.
Those are supplemental to its cadre of Asia-focused subsidiaries but no less important to its broader aspirations.
Geely has been exceptionally clear that its ultimate goal is to increase its presence around the world while improving its production capabilities. Its latest strategy involves utilizing new platforms developed for Volvo (which was already sharing architecture with Lynk) for vehicles manufactured in Asia under the Proton banner.
Over the past decade, regular reports that Chinese automakers were readying a major push into the North American market became commonplace. We started seeing them move out of trade show basements to take up some of the most desirable real estate on the main floor. While some of the product clearly wasn’t yet up to snuff, one could imagine budget-focused products flooding the U.S. and Canada after a few years of polish. However, the last time that seemed like a likely scenario was 2018.
Chinese brands are still trying to break into the untapped North American market; some even have physical office space set up within the United States. However, Sino-American relations have soured dramatically over the past few years, and new financial hurdles have made wrangling a new market extremely difficult.
Polestar has released details of its Precept concept, offering a reminder that this will be the vehicle that informs all future models the company produces. Jointly owned by Volvo Cars and Zhejiang Geely Holding, Polestar has morphed from the Swedish manufacturer’s partner in performance engineering into a separate brand specializing in sporting EVs.
We’ve seen the Precept before, bashing it gently in February for being a handsome sedan with a manufacturer that wasted everyone’s time (and its press release) by prattling on endlessly about green tech and sustainability. While we had hoped Polestar would remedy this in its follow-up teaser, powertrain details remain nonexistent. Considering this is a concept car, that’s not an unforgivable sin, but it’s curious a company supposedly focused on performance engineering has twice failed to discuss that aspect of the vehicle. Instead, we’re offered additional details about the model’s design — including some new photographs — as the brand continues to discuss sustainability and high-tech features.
Just enough to keep us interested. The bare minimum.
Now fully an automotive brand, Polestar aims to attract more than just a limited number of hugely wealthy customers. That was Polestar 1. Now it’s time for Polestar 2, a more affordable, four-door electric sedan with sporting prowess and eco-consciousness in spades.
How did Polestar pull off the unusual feat of starting production of a new model when assembly lines across the globe are going dark amid the coronavirus pandemic? Because production is occurring in China, the country that birthed the virus, then left it on its neighbors’ doorsteps.
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Jeff S @Lou_BC--Diamonds are not really rare DeBeers dominates the diamond market and created the market with advertising starting in the 1930s thru the 40s. Before that time diamonds were for the most part considered for the wealthy and diamond wedding rings were not that common. Go back 100 years and most women wore wedding bands made of gold, silver, or other metals. DeBeers dominating the diamond market also controls the supply of diamonds keeping the prices higher by restricting supply. Sound familiar? Oil companies have learned to restrict supply of oil as well.https://blog.hubspot.com/marketing/diamond-de-beers-marketing-campaign
- Statikboy So they named it after the worst cracker."Perhaps that’s why the autonomous dream appeals to so many - they’ve never experienced satisfaction, or even fun, whilst operating a motorcar.""This 2022 Mazda CX-30 Turbo, for example, can certainly handle the drudgery of the daily commute with aplomb but can make a detour on a twisty two-lane a bit more enjoyable."While the autonomous dream doesn't appeal to me at all, I think the reason that it does appeal to so many is because it theoretically has the potential to make the drudgery of the daily commute a bit more enjoyable.
- Jeff S Arthur and I might be in the minority but we miss cars like this. We will never see cars like this again and it is what it is. I did like driving my mothers 72 Sedan Deville and her 84 Chrysler 5th Avenue with leather interior and Boise Dolby stereo along with some of the other luxury cars I drove from this era. At least I got to experience them and if I want more I can always read Corey's well written articles and watch Adam on Rare Classic Cars.
- ToolGuy "Idle," or "Shutter"? Let's don't get completely lazy.
- Jeff S Might not matter during car shortages. I have a Costco and Sam's membership which I thought about using for buying a vehicle but when the Maverick order banks opened up in June 2021 I went online to built my own Maverick and still had to go to the dealer to order it. With vehicle shortages you might still have to go to the dealer to order but it might be worth it to try to use Costco if you know what you want and are not too picky about colors and options to see what is available now especially if you don't want to wait for a vehicle. I doubt in today's environment that you would save a lot on the purchase of a new vehicle especially since many dealers are adding adjustments to market prices on top of msrp.