Proceeds will help the Swedish carmaker owned by China’s Zhejiang Geely Holding Group Co. fund its shifts to fully electric cars and a direct-to-consumer sales and subscription model, the company said in a statement Monday. Geely intends to remain its largest shareholder with the first day of trading planned for this year.

“We have supported the transformation and growth of this iconic Swedish brand during a period of unprecedented change in our industry,” Geely Chairperson Eric Li said in the statement. “We will continue to support Volvo Cars as a majority shareholder in this ongoing global success story.”

Volvo’s listing plan got a boost from Polestar, the electric car company backed by the Swedish carmaker and Geely, which last month agreed to go public via a blank-check firm at a roughly $20 billion valuation. Once the deal is completed, Volvo expects to own close to 50% of the combined company.

The decision to list puts Volvo, founded in 1927 in Gothenburg, neck-and-neck with the four-year-old EV maker that will use the incumbent manufacturer’s production network. Volvo last year sold some 660,000 cars, and Polestar aims to deliver 29,000 vehicles in 2021 before adding new models to significantly grow its footprint.

“Volvo Cars is really making the transition, to the new way of owning as well as driving a car,” said Anders Oscarsson, head of equities at AMF, which intends to keep its holding in Volvo after the IPO. The carmaker is “open and transparent company that is full of innovations.”

The listing is set to be Sweden’s largest since telecommunications company Telia Co AB went public in 2000, raising $8.9 billion, and Europe’s second-biggest IPO so far this year after Poland’s InPost SA.

Sales Boost

As part of raising fresh funds, Volvo targets boosting sales to 1.2 million vehicles by 2025, it said Monday. Operating returns are set to rise to between 8% to 10% by then, compared with 3.2% last year, when Covid-19 related shutdowns hampered sales across all carmakers. 

Other EV-only carmakers like NIO Inc., selling few vehicles but free from legacy businesses like making combustion engines, have seen their valuations rocket past the likes of BMW AG or Ford Motor Co. in a wake-up call to larger manufacturers.

Volvo going ahead with an IPO marks a high point for parent Geely Holding, who acquired the company from Ford in 2010 for $1.8 billion. Keeping much of its independence, the carmaker flourished under the new ownership with China becoming its largest market, followed by the U.S., Sweden and Germany. After successfully overhauling its lineup with cars like the XC90 SUV, Volvo this year set an ambitious goal to go fully electric by 2030.

Previous Plan

Geely Holding previously pursued an IPO of Volvo Cars in 2018. It shelved the plans after investors balked at its proposed valuation of as much as $30 billion, people familiar with the matter said at the time. 

Companies have raised $662 billion from IPOs globally during the first three quarters this year, according to data compiled by Bloomberg. That’s up from $447 billion over the same period last year, when the pandemic reduced the number of listings.

In the first nine months of the year, Volvo sold 530,649 cars, a 18% increase on a year ago, though the company warned supplier shutdowns and material shortages like the global chip crunch will hurt output during the second half. 

This “will have an impact on revenue and profit, but Volvo Cars’ outlook for the full year 2021 still remains,” the carmaker said last month.

More finance coverage from Fortune:

• She ran Bumble’s IPO while being treated for breast cancer. Now she’s becoming a CEO
• Home insurance rates for millions of Americans are about to go up
• Funding paid leave and child care narrows gender wage gap, says new report
• Why aren’t interest rates going up? There are 3 possible reasons
• A supply shock is about to hit the housing market—the question is how big?