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Volvo Cars plans $20 billion stock IPO this month, sources say

STOCKHOLM — China's Geely Holding is in advanced discussions with banks to list its Volvo Cars unit in the coming weeks, three sources told Reuters, in what is expected to be one of Europe's biggest initial public offerings (IPOs) this year. Volvo Cars is aiming for a valuation of about $20 billion in the planned Stockholm listing, the sources said, with one saying the launch was penciled in for the end of September. Goldman Sachs and SEB are leading the transaction, while other banks including BNP Paribas, Carnegie and HSBC are also involved in the deal, the sources added. Volvo Cars declined to comment. Geely did not immediately respond to an emailed request for comment outside normal business hours in China. SEB and Goldman Sachs declined to comment. The other banks were not immediately available. Geely, which bought Volvo from Ford more than a decade ago in the biggest acquisition by a Chinese firm of a foreign car maker, sought to float shares in the Swedish firm in 2018 but then pulled the deal citing trade tensions and a downturn in automotive stocks. Traditional carmakers have fallen out of favor in recent years, as Tesla has risen to be one of the world's most valuable companies, putting the focus on electric vehicles. Many European firms have pivoted toward the electric sector, including Volvo, which aims to only make fully electric cars by 2030 and owns a 49.5% stake in electric car maker Polestar. Valuation Gothenburg-based Volvo Cars aims to secure a valuation of roughly $20 billion, one of the sources said, while another mentioned a possible range of $20 billion to $30 billion. A third source suggested a $16 billion valuation was more realistic, citing the firm's revenue outlook. A $20 billion valuation for Volvo would be equivalent to six to seven times its earnings, a level some analysts say is high although it would put it in line with rivals Daimler and BMW. Tesla's valuation is more than 70 times that. NordLB's automotive analyst Frank Schwope estimated a valuation range of $10 billion to $15 billion. "The strong margins seen in the first half of 2021 are unlikely sustainable as the market benefited from a strong post-pandemic rebound that is unlikely to continue," Schwope said. For Geely's founder Li Shufu, who bought Volvo for $1.8 billion, the listing is a milestone on the road to transport of the future, where cars are part of an electrified network of mobility services generating data and business opportunities.

Geely to release models developed with Volvo in 2015

Geely and Volvo will finally team up for a jointly developed vehicle, more than three years after the safety-minded Swedish brand was gobbled up by Geely's parent company, according to a report in Automotive News Europe. The story quotes Geely's CEO, Gui Sheng Yue saying, "We have entered into actual research and development stage and I believe we can see the new product in the year after next."
That means 2015, which is a mighty ambitious timetable to bring a vehicle to market. But as Geely's CEO explains, life isn't going to get any easier in the Chinese market, "Competitive pressure on domestic brands in the China market should increase considerably in the coming years as most major international brands are strengthening their presence," he told ANE. Those statements also tell us that we shouldn't expect to see Geely on American shores any time soon. The brand is simply too focused on topping the Chinese market, at least among CDM brands.

Volvo XC90 Coasting Transmission Deep Dive | How, when and why of coasting

In our recent 2021 Volvo XC90 Recharge review, its turbocharged-supercharged-hybridized powertrain delivered impressive horsepower and fuel economy. But Volvo has one additional trick up its sleeve, propelling a car with power that's simpler, cheaper and all-natural: It's the power of momentum and gravity. I've always been halfway to a hypermiler. I'm not obsessive about it, but in city driving, I enjoy timing stoplight approaches to keep the wheels rolling and avoid the inertia of restarting from a stop. There's little point to needlessly racing and braking between red lights, wasting kinetic energy (and therefore fuel). So I tend to drive strategically instead, often catching up with the drivers who jackrabbit but get hung up at the lights. And, back when I owned a long line of vehicles with manual transmissions, I coasted. Coasting used to be slightly controversial. Some claimed it doesn't actually save gas, though my mileage calculations showed otherwise. Another school of thought insisted that removing engine braking from the equation, even momentarily, constitutes a dangerous loss of control. Of course, an experienced driver can slip a manual transmission back into gear in a flash when engine braking's actually needed. And one should always use some common sense and judgment about when and where to coast. I'm not talking about careening down a 15% grade into a school zone.  Anyway, those arguments became moot when automatic transmissions pretty much took over. (And no, never coast with a typical automatic transmission. Even if it weren't damaging to your type of automatic — but assume that it is — the risk of screwing up a nudge of the shifter from drive into neutral is too great.) XC90 Recharge 8 View 18 Photos But happily, some automakers in recent years have added a coasting feature to their automatics, with the aim of eking out more fuel efficiency. Volvo calls the feature on its Aisin eight-speed "Eco Coast." Some Mercedes, BMWs and others call it "sailing" or "gliding." The Hyundai Ioniq, Ford Mustang Mach-E and Polestar 2 are among EVs that allow you to cancel out all regeneration and freewheel downhill. And future cars such as the BMW iX are also being designed to do it. By building coasting into the clockworks, automakers have taken any traffic safety concerns out of the question, because the car will instantly switch you back into gear when needed.