Swedish automaker Volvo Cars is throwing itself headlong into the future -- and it might be laying the groundwork for an IPO.

In the company's latest business update, CEO Hakan Samuelsson announced an aggressive set of future-tech business goals, including big ambitions for fully electric and self-driving vehicles -- not in the distant future, but over the next several years.

Here's what we know.

A white Volvo XC40 plug-in hybrid SUV, shown plugged into a charger.

Volvo Cars will soon go beyond this plug-in hybrid with a line of fully electric vehicles. Image source: Volvo Cars.

Volvo's plan: More electric, autonomous, and shared vehicles

Here are the key "expectations" set by the company in its June 7 business update. It expects to realize all of these goals by "the middle of the next decade," it said.

  • Electrification. No weasel words here: Volvo said that it expects fully electric vehicles  to account for half of its annual sales by the middle of the next decade.
  • Autonomy. Volvo expects vehicles with autonomous capabilities to account for a third of its annual sales by that time.
  • Subscriptions. Volvo expects half of its vehicles to go to customers using its recently launched subscription service.

There's another, related goal: Volvo aims to have more than 5 million direct consumer relationships by mid-decade, which it can leverage to create recurring revenue via connected services and related offerings.

What is Volvo Cars thinking here?

What's the thinking behind this plan? Samuelsson said it clearly:

Our customers' expectations are changing rapidly. This means that Volvo Cars is also changing rapidly. These initiatives will help transform Volvo from being purely a car company to being a direct consumer services provider.

Put another way, Volvo wants to thrive as traditional vehicles, and traditional models of vehicle ownership, are disrupted.

Is this plan plausible?

it's an ambitious set of expectations for a small automaker that -- at the moment, at least -- doesn't have any electric vehicles, much less self-driving ones. But Volvo does have a few things going for it, starting with a deep-pocketed and forward-thinking owner: Chinese automaker Zhejiang Geely Holding Group.

Zhejiang Geely is a holding company that owns Volvo Cars and several other automakers. Notably, it owns Geely Automobile Holdings (NASDAQOTH:GELYF), known as Geely Auto, which has grown rapidly to become the largest domestic Chinese maker of passenger vehicles. Geely also owns Lynk & Co., an upscale Chinese brand, and Polestar, an electric high-performance brand created as a joint venture between Volvo Cars and Geely Auto. In addition, Geely has a substantial stake in Malaysian automaker Proton Holdings, which in turn owns Lotus Cars, the small British sports-car maker.

Got all that?

Here's the real takeaway: Geely is an aggressive, well-funded company run by one of China's great entrepreneurial visionaries, Li Shufu. Volvo wouldn't be setting these goals without Geely's support -- and without being sure that it will have the capital it needs to meet the goals.

Since acquiring Volvo Cars from Ford Motor Company (NYSE: F) in 2009, Geely has struck a good balance of giving its Swedish subsidiary the resources and support to grow while largely maintaining its independence. Geely's backing makes the plan plausible.

The Polestar 1, a plug-in hybrid sports coupe from a joint venture between Volvo Cars and Geely Auto.

The first Polestar model will be a hybrid, but all future Polestars will be battery-electric vehicles. It's easy to see the Volvo heritage in the Polestar 1's styling. Image source: Volvo Cars.

Where will Volvo get the technology?

Volvo already has a self-driving development program well under way, via a joint venture called Zenuity that it formed with Sweden-based auto-industry supplier Autoliv (NYSE:ALV) in 2016. Zenuity is aiming to deliver advanced driver-assist systems next year, with a Level 4 self-driving system arriving around 2021. (Volvo will use Zenuity's systems in its own vehicles; Autoliv will market them to other automakers.)

Volvo also announced this week that it has taken a stake in a start-up called Luminar, which is developing an advanced lidar system -- a key sensor for autonomous vehicles.

As for electric-vehicle technology, that's being developed with Geely, which already has short-range electric cars on sale in China. In addition to the first all-electric Polestar model, Volvo is expected to launch a battery-electric versions of its small XC40 crossover SUV soon. More broadly, all new Volvos launched after this year will be offered in hybrid or pure-electric (or both) versions.

Why investors should be watching Volvo Cars

Volvo Cars isn't public at the moment. (Don't confuse it with its former corporate parent, Swedish truckmaker Volvo AB. They're different companies and have been for years.) But it has repeatedly hinted that an IPO could lie in its not-too-distant future. Geely wouldn't give up control, but a public offering would give Samuelsson some additional funds to invest -- and perhaps a bit more independence from Geely.

Volvo might or might not hit its ambitious "mid-decade" sales goals. But given its track record under Geely's ownership, I expect that it will have competitive technology and the ability to mass-produce it by then, whether buyers appear or not.

Long story short: Don't count out Volvo in the upscale self-driving electric-vehicle stakes -- and keep an eye on this intriguing company as it considers a public offering.

John Rosevear owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool has a disclosure policy.