Volvo Cars to cut stake in electric carmaker Polestar from 48 percent to 18 percent

Swedish carmaker Volvo Cars will reduce its stake in electric vehicle maker Polestar Automotive Holding and stop financing the unprofitable electric vehicle maker, so it can focus on its own battery technology. Volvo plans to transfer part of its stake, valued at approximately 9.5 billion Swedish kronor (21.6 billion CZK), to its shareholders. It will retain an 18 percent stake in Polestar, down from 48 percent, the company said today in a press release.

Analysts have criticised Volvo’s strong involvement in Polestar, saying it is draining Volvo’s resources, Reuters reported. Polestar shares have recently fallen amid a slower production ramp-up than expected, as well as a broader cooling in demand for electric vehicles.

“Given our significant operational cooperation with Polestar and our financial ties, it makes sense for us to retain influence in Polestar through a smaller, 18 percent stake,” said Volvo President and CEO Jim Rowan.

Volvo also has a financial relationship with Polestar through an outstanding convertible loan worth USD 1 billion (23.4 billion CZK).

Chinese company Zhejiang Geely Holding owns a majority stake, specifically 79.5 percent, in carmaker Volvo Cars. Geely chairman and owner Li Shufu holds roughly a 39 percent stake in Polestar. Geely also has stakes in automakers Aston Martin and Mercedes-Benz, as well as truck manufacturer Volvo. It is also seeking to bring more of its brands to Europe, including premium electric vehicle brand Zeekr.

Geely will continue to support Polestar operationally and financially. Volvo Cars will support Polestar in research and development, manufacturing and sales.