STOCKHOLM (Reuters) – Volvo Cars, owned by China’s Geely Holding, said on Thursday it had established a new framework to help it fund its electrification strategy and climate plan.
The Sweden-based car maker said the framework would pave the way for its first green bond, aimed at supporting development of new electric car models and increasing production capacity for batteries as well as electric vehicles.
Funds raised under the framework will be earmarked for climate-related projects, Volvo said, adding it would provide improved transparency for investors.
“Our Green Finance Framework allows investors to participate in the transformation of Volvo Cars into an electric car maker,” CEO Hakan Samuelsson said in a statement.
Volvo, bought by Zhejiang Geely Holding Group Co Ltd from Ford Motor CoF.Nin 2010, is targeting a 40% reduction in the carbon footprint of each car it manufactures by 2025 and aims to become fully climate neutral by 2040.
The company is looking to reach the 2025 targets through a string of measures, including generating 50% of global sales from fully electric cars and having a 25% share of recycled plastics in new vehicles.
Sales of plug-in hybrid cars amounted to almost a quarter of its sales in Europe during the first half of 2020.
Reporting by Helena Soderpalm; editing by Niklas Pollard