Volvo Stops Funding Polestar
Volvo Cars will stop providing funding to Polestar and will transfer responsibility for the brand to China’s Geely, which is Volvo’s majority shareholder.
Volvo’s heavy involvement in Polestar, where it owns about 48% of the EV maker’s shares, has been criticized by analysts who see the stake as a drag on Volvo’s resources. Zhejiang Geely Holding Group, the parent of both brands, is preparing to provide more funding to Polestar as part of a potential redistribution of shares to relieve pressure on Volvo. Geely said that it will fully support Polestar as an independent brand. This will not affect its 79% holding in Volvo, the company said.
The proposed deal would see Volvo transfer some its 48% stake in Polestar to Geely, Volvo said. The redistribution of shares follows a slower-than-expected ramp up at Polestar, together with a broadening EV cooldown that has dragged its shares to a record low.