Swedish automaker Volvo said Monday it plans to raise at least 25 billion kroner ($2.9 billion) by selling shares to fund its electric vehicle transformation strategy.

Volvo Cars and its parent company, Chinese carmaker Geely, have applied to hold an initial public offering on the Nasdaq Stockholm, with shares expected to start trading before the end of the year.

The money raised from the IPO will help fund Volvo’s lofty ambitions. The company aims to nearly double sales by 2025 to 1.2 million vehicles, half of which will be battery electric cars, and wants its entire lineup to be all electric by 2030.

“We’re going to be the fastest in the business to transform, to electrification – 2030 no more combustion cars. And that’s just one one part,” CEO Hakan Samuelsson said in an interview.

Volvo’s plans also include selling more directly to customers and it aims to have half of all sales come from online channels by mid-decade.

“All of that costs a lot of money. So that’s why we are now doing a primary issue of new shares to secure equity for that transformation next year.”

Most of Volvo’s current lineup is made up of plug-in hybrid and so-called mild hybrid models. Battery electric vehicles account for only a small fraction of the total sold.

Volvo is based in Goteborg, Sweden, but has been owned since 2010 by Geely, one of China’s biggest independent automakers, which bought it from Ford for about $1.8 billion.

The company is moving ahead with the share sale even as a shortage of semiconductors has crimped global auto production.

The shortages will likely persist to at least the end of the year, Chief Financial Officer Bjorn Annwall said. But because the crunch is being felt across the car industry, automakers can get away with selling pricier models or offering fewer rebates for fatter profit margins, which more than makes up for lower sales.

“From a financial perspective, this shortage of semiconductors is not such a big issue,” Annwall said. “Of course, some customers have to wait longer than we’d like to get the cars delivered. And so it’s a problem. But it’s a problem we have now learned to live within and we don’t see an improvement extremely short term.”

Volvo’s sales tumbled in September, falling 30% to 47,223 from the year before, according to monthly sales figures released Monday. Annwall said the problem was less to do with chip supplies and more because of COVID-19 lockdowns in Southeast Asia that temporarily shut its suppliers’ factories, leading to general component shortages.

(AP)