Volvo Financial services, one of the world’s largest car dealerships, has been adding Tesla Motors as one of its investments, the company said on Tuesday.
The investment will see Volvo acquire Tesla Motors and a controlling stake in the company.
The acquisition is valued at $1.5 billion, Volvo said in a statement.
Volvo, the world´s third-largest carmaker, is valued between $4.4 billion and $6.2 billion by U.S. equity analysts.
Volvo has made investments in Tesla stock since the company became publicly traded in 2014.
The company previously announced that it would buy shares of Tesla, but did not say when the deal would happen.
Volkswagen AG (VOWG_p.DE) has been the world leader in electric vehicles, with more than 3 million EVs on sale around the world.
Shares of Tesla were up 0.3% at $8,098.60 in early trading in Frankfurt.
Read more Tesla shares rose as much as 12% to $19,093.75 on Tuesday as investors cheered news of the deal.
Tesla has not announced any specific details about its investment in Volvo Financial.
Volvos cars are made in the U.K. and the Netherlands.
Tesla is the world`s largest maker of electric cars, according to its website.