Volvo Cars have a strategic direction to become fully electric by 2030 and shape the future of mobility. In line with these ambitions, Volvo Cars will divest its 33 per cent holding in Aurobay to Geely Holding.
The divestment is yet another important step in Volvo Cars’ transformation towards becoming a fully electric vehicle (EV) manufacturer. It also makes Volvo Cars the first car manufacturer to fully exit its participation in the development and manufacturing of internal combustion engines (ICEs).
Johan Ekdahl, Volvo Cars CFO, said: “The automotive industry is going through rapid change and Volvo Cars is committed to leading this transformation.
“As we continue to execute on our strategy, transactions like this will be an important supplement to our investments and partnerships for the future.”
In line with its electrification ambitions, Volvo Cars will focus its investments and capital allocation on developing high-performance fully electric powertrains. During this period of transition to a fully electric future, Aurobay will remain a strategic partner to Volvo Cars and the sole provider of hybrids and mild-hybrid powertrains.
Javier Varela, Volvo Cars COO and deputy CEO, said: “We are impressed by the progress Aurobay has made as a separate entity since its creation in 2021. In line with our ambition to become fully electric by 2030, Aurobay remains our strategic supplier.”
Aurobay was formed as a stand-alone business in 2021 when Volvo Cars Powertrain Engineering Sweden, including its Skövde-based engine plant and the related R&D team, along with its engine plant in China and other relevant assets, were carved out from Volvo Car Group. This divestment shows Volvo Cars are leading the way when it comes to moving to an all-electric future.
The detailed terms of the transaction are not disclosed. The proceeds from the divestment will be used in Volvo Cars’ transformation to a fully electric company, including its new production line for electric motors in Skövde, Sweden. The transaction is expected to be closed before the end of 2022 as long as the necessary regulatory approvals have been obtained.
This follows the news earlier in the year that Volvo Cars will establish a new manufacturing plant in Slovakia, its third in Europe. This will position the company well to meet the continued demand from its customers for electric vehicles and capture future growth potential.
This new state-of-the-art plant will be climate neutral and build only electric cars. This underpins the company’s ambition to become fully electric by 2030 and climate neutral by 2040.