Volvo stops funding Polestar electric sports car brand amid cooling EV market

Volvo Cars announced Thursday that it will end funding for electric sports car brand Polestar Automotive. new york post report.

Volvo shares soared more than 30% after the company announced it would withdraw funds from its subsidiary. Polestar could be handed over to China-based Geely Holding, Volvo’s largest shareholder. CNBC It was reported that Geely Auto currently holds 78.65% of Polestar shares.

“Volvo Cars is considering a possible adjustment of its Polestar shareholding, which could result in Geely Swedish Holdings becoming a significant new shareholder,” the Swedish carmaker said in a statement on Thursday. Stated. press release.

The company is focused on “focusing resources on our own ambitious initiatives, including developing our own electric vehicles.”

Volvo added: “Polestar is entering an exciting phase as we strengthen our business plan and position ourselves for future growth.”

Volvo CEO Jim Rowan told CNBC that the decision to cut funding was a “natural evolution” in the relationship between the automakers.

“Obviously, we spun out Polestar as a separate company a long time ago, and we’ve been growing and collaborating with Polestar over the years since then,” Rowan said. Ta. “Come on, Polestar…they have a very exciting future ahead of them. They’re going from a one-car company to a three-car company, with two brand new cars coming soon. In fact That will happen in the first half of this year, which will set them on a new growth trajectory.”

Despite the EV market appearing to be cooling, Volvo still aims to have its entire fleet fully electric by 2030. The company’s EV sales increased by 70% in 2023.

on thursday press release The struggling startup welcomed Geely Sweden Holding as a “potential direct new shareholder” from Polestar.

“Volvo Cars is considering possible adjustments to its Polestar shares, including the distribution of shares to shareholders, with Geely Sweden Holding as the main recipient.Volvo Cars will continue to invest in research, development, We will continue to be a strategic partner across manufacturing, after-sales and commercial areas,” Polestar explained.

The EV carmaker’s stock price has fallen 80% since its debut. Earlier this month, Polestar announced plans to cut its workforce by about 15%, citing “difficult market conditions.”

“Polestar is at one of the most promising stages of development as our line of luxury performance vehicles expands,” said Thomas Ingenrath, the automaker’s chief executive officer. “We have increased sales to China, Europe, and Australia,” he said. “The Polestar 4 and Polestar 3 are scheduled to begin their first customer deliveries this summer. We look forward to continued cooperation with Volvo Cars and look forward to working with Geely on future-oriented technology. We look forward to benefiting from further synergies.”

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