Geely invests in Volvo Trucks to take down Tesla
Geely wants a share of the electric autonomous truck segment.
While they share a name and a logo, Volvo Cars and Volvo Trucks haven't lived under the same roof since Ford purchased the car-maker in 1999. They're partially re-united now that Geely acquired a sizable stake in Volvo Trucks.
Geely, the Chinese giant responsible for turning Volvo Cars around, just spent about $3.3 billion on an 8.2-percent stake in Volvo Trucks. The purchase will be finalized in the coming weeks.
"Given our experience with Volvo Car Group, we recognize and value the proud Scandinavian history and culture, leading market positions, breakthrough technologies and environmental capabilities of AB Volvo," said company chairman Li Shufu.
At first, the move looks puzzling. Why would Geely invest in trucks? It already has its plate full with Volvo, Polestar, Terrafugia, Lynk & Co, Proton, Lotus, and the brands it distributes in China. The answer may be Tesla's recently-introduced truck.
Shufu added Geely's Chinese origins can help the truck-maker expand. He also pointed to Volvo's newfound expertise in autonomous and electric technologies. Taken at face value, his comments suggest he wants Volvo Trucks to build an electric autonomous truck for the Chinese market, beating Tesla to the punch. It doesn't require a great deal of imagination to speculate the model would be sold in the United States and Europe, too.
The purchase is purely a strategic one. The idea isn't to re-unite Volvo Cars and Volvo Trucks for the sake of nostalgia. Geely hasn't commented on whether it's satisfied with an 8.2-percent stake or if it plans to buy another slice in the coming months.
Geely's acquisition spree might not stop at Volvo Trucks. It tried buying a five-percent stake in Mercedes-Benz parent company Daimler through a discounted share placement but the Germans turned down its request. The latest reports suggest it's now looking to acquire five percent of the group on the open market.
Note: Volvo Iron Knight concept pictured. Photography by Ronan Glon.