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Volvo Cars’ stock market debut – good for Gothenburg and Sweden

9 November 2021
Volvo Cars press image
Volvo Cars has raised SEK 20 billion from new shareholders after its introduction on the stock market on 29 October. The funds will be invested in the carmaker’s shift to electric vehicles and climate smart mobility. By Swedish standards, it’s a major green investment – that can have positive effects on the nation.

The owners and management of Volvo Cars want to transition quickly to deliver and live-on sustainable, fossil-free mobility. The new capital will among other things be invested in developing and producing their own batteries, together with Swedish battery maker Northvolt. 
Jobs, skills development and competitiveness

“That Gothenburg and Sweden’s largest private employer has raised so much funding for green investments is very good news. Volvo Cars’ journey towards full electrification is important for jobs, skills development and competitiveness in Sweden,” says Maria Strömberg, director of Clusters and Innovation at Business Region Göteborg. 

Volvo Cars employs nearly 25,000 people in Sweden and creates approximately an additional 60,000 jobs within the economy. But it is also about the types of expertise that will be employed. 

Here, it concerns highly qualified consultants, software companies and other tech companies who engage in and develop technical and legal solutions, new designs and new business models for tomorrow's sustainable mobility - electrically powered, shared and digitalised.

“The investments that Volvo Cars are making helps secure Gothenburg’s position as Sweden’s innovation powerhouse and one of the world’s leading regions for sustainability. In the wake of the investments made in modern mobility, tech companies are taking up more and more space. This is a clear trend we are currently seeing,” says Maria Strömberg.

A part of the solution to the climate crisis 

In terms of knowledge, Volvo Cars is expected to become a leader not only in the automotive sector, but in the conversion of the entire Swedish industry towards fossil-free. A stronger section of subcontractors, in terms of knowledge, also benefits the Swedish transition in general, and strengthens Swedish competitiveness internationally.

“As an industrial country, we want and need to be part of the solution to the climate challenge. This is where new jobs are being created,” says Lars Bern, Group Manager Automotive and Transport at Business Region Göteborg.

How big the effect will be on the rest of Sweden depends to a large extent on how successful Volvo's transition will be, and where concrete investments land geographically. This is not yet known. The competition is extremely tough and difficult to predict.

“But we know that management and the owners have been very successful during the past eleven years, selling more and more cars, taking market shares and increasing their margins. And Volvo Cars is in many ways prepared for total transformation,” says Lars Bern.

Even stronger in research and development

How much is the raised capital, SEK 20 billion (approximately EUR 2 billion), put into perspective?

“It is more than what Geely once paid for the entire Volvo Cars. The sum can also be compared with the total cost of all private research and development in Sweden annually - SEK 122 billion. The Gothenburg region's companies account for a third of that sum, 41 billion,” says Peter Warda, senior analyst at Business Region Göteborg

“For western Sweden, we are talking about 50% more in private R&D funds, through Volvo Cars' IPO alone. This is good for Gothenburg and it is good for Sweden,” says Peter Warda. 

 

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