Polestar used to be synonymous with sporty Volvo cars, but it seems the Swedish carmaker is done associating itself with the iconic namesake. Now a separate spin-off electric car company, Polestar’s struggles with sales targets and a general slow-down in EV take-up – coupled with Volvo’s own struggles with EVs – has prompted the latter to halt further funding to the brand, and is now considering offloading much of its 48% stake in the EV brand over to its parent company, Geely.
Volvo said in a media statement it is “evaluating a potential adjustment to [its] shareholding in Polestar, including a distribution of shares to Volvo Cars shareholders,” which “may result in Geely Sweden Holdings becoming a significant new shareholder.”
According to Bloomberg, Geely is already preparing more funding for Polestar to “relieve” Volvo’s “financial pressure”. That said, the two Sino-Swedish brands will still share major parts of their operations, including collaboration across R&D, manufacturing, after sales, and commercial businesses.
READ MORE: Malaysia amongst top 15 global markets for electrified Volvo cars – 71% of all cars sold in 2023
The news follows recent layoffs at Polestar, where the company cut 15% of its global workforce in an attempt to minimise its overhead. The company also requires fresh investments – as much as USD1 billion accordiMalaysia amongst top 15 global markets for electrified Volvo cars – 71% of all cars sold in 2023ng to reports – to even stay afloat for the next year. The company reported an operating loss of USD735 million after the first nine months of 2023.
With Volvo now reducing its direct involvement in the company, Polestar will now be able to “go and get funding from other sources”, Volvo Car Chief Executive Officer Jim Rowan told Bloomberg Television.
Volvo Cars have also been fighting its own battles, with the Swedish carmaker having to cut some 1,300 jobs last year. This move will help the company focus its efforts on upcoming EV rollouts, which have been plagued by software development issues that have delayed the market launch of the EX90.
