Volvo Cars shares rose on Friday after its £13bn stock market debut, as investors bet on the carmaker’s planned shift to electric vehicles.
The Swedish firm’s stock was trading at 59.99 Swedish kronor (£5.10) on Friday morning, pushing past the listing price of 53 kroner a share in the wake of the initial public offering (IPO), which the company said was “substantially oversubscribed”.
Volvo, which is owned by China’s Zhejiang Geely Holding Group and headquartered in Gothenburg, said the flotation in Stockholm valued the company at 158bn kronor and would help fund plans to shift entirely to electric vehicles within the next decade.
The IPO is one of Europe’s largest this year and Sweden’s biggest since the telecom operator Telia Co AB listed in 2000.
“Volvo Cars has an ambitious strategy to become fully electric by 2030 and is also undergoing a transition towards a more direct to customer sales model,” said Håkan Samuelsson, the chief executive of Volvo Cars.
“Today’s listing will help us get there and I would like to extend a warm welcome to all our new shareholders. We will work hard to execute our plan and create further value for all shareholders.”
The upbeat start to trading comes after Volvo scaled back the size of its IPO earlier this week by pricing its shares at the low end of its initial range.
It also marks the second time that Geely has attempted to take the company public, having originally abandoned plans for a flotation in 2018 because of trade tensions and a downturn in automotive stocks. Geely’s Swedish division took over as the carmaker’s majority shareholder in 2010.
Despite excitement over the electric vehicle rollout, experts have warned that Volvo’s short-term growth could be hindered by the semiconductor crisis.
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Carmakers around the world have struggled to ramp up their output because of the disruption caused by the coronavirus pandemic, which has most notably resulted in a global shortage of computer chips. They are used in everything from entertainment systems to controlling windscreen wipers and electric car batteries.
The Society of Motor Manufacturers and Traders expects the chip crisis to wipe 100,000 off the UK’s total car production for 2021.
Volvo, which was founded in Sweden in 1927, sold 770,000 cars in more than 100 countries in the year to June.
Read More: Volvo shares charge ahead on £13bn stock market debut | Volvo