Volvo Cars has a strategic direction to become fully electric by 2030 and shape the future of mobility. In line with those strategic ambitions, Volvo Cars will divest its 33 percent holding in Aurobay to Geely Holding.
The divestment is yet another important step in Volvo Cars’ transformation towards becoming a fully electric car manufacturer. It also makes Volvo Cars the first car manufacturer to fully exit its participation in the development and manufacturing of internal combustion engines.
“The automotive industry is going through rapid change and Volvo Cars is committed to lead this transformation,” says Johan Ekdahl, chief financial officer for Volvo Cars. “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.
“We are impressed by the progress Aurobay has made as a separate entity since its creation in 2021,” says Javier Varela, chief operating officer and deputy CEO at Volvo Cars. “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.
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 year end 2022, provided necessary regulatory approvals have been obtained.