One source said Gothenburg-based Volvo Cars is aiming to deliver a valuation of around $20 billion, while another cited a possible range of $20 billion to $30 billion.
A third source suggested that a valuation of $16 billion is more realistic, citing the firm’s revenue outlook.
A $20 billion valuation for Volvo would be the equivalent of six to seven times its earnings, a level that some analysts say is high, aligning it with rivals Daimler and BMW. Tesla’s market capitalization is approximately $745 billion. General Motors’ valuation is approximately $74.5 billion.
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 to be sustainable as the market has benefited from a strong post-pandemic recovery that is unlikely to continue,” Schwope said. Said.
For Li Shufu, founder of Geely, who bought Volvo for $1.8 billion, the listing is a milestone on the road to transporting the future, where cars are part of an electric mobility services network that generates data and business opportunities.
A number of startups kicked off the investor spree for EVs this year. Rivian, which rolled its first electric pickup truck off the production line this week, will seek a valuation Between $70 billion and $80 billion According to Reuters sources, it will go public later this year.
Nordea Chief Investment Officer John Hernander said the bank is interested in buying Volvo shares if a large enough portion of the company is sold to keep liquidity high.
“This is important. We and others are really disappointed with the low liquidity in Traton,” he said, drawing parallels with the 2019 IPO of the truck unit, in which Volkswagen took an IPO of 11.5 percent.
Volvo warned this month that sales volumes in the second half of 2021 could drop year-over-year after it had to cut production due to shortages of materials.