Volvo will nevertheless still partner with Polestar across R&D, manufacturing, and after-sales components.
In spite of the brand having stemmed from Volvo’s motorsports arm, Polestar may not really be all that Volvo any more. Such is because Volvo has recently just announced that it has pulled the plug on further funding the fledging EV marque, which comes as yet another blow to the company after its somewhat lacklustre sales performance over the past year.
Now for anyone who does happen to be interested in purchasing the just newly released Polestar 4 however, it is worth knowing that the automaker will likely still be around for now at least. That is as in spite of Volvo having announced that it aims to shed its stock in the company, it is nevertheless evaluating to transfer the stake it has in it over to the startup EV brand’s co-founder Geely.
What more is that while its Swedish parent wants no financial ties with Polestar any more, Volvo apparently will still be collaborating closely with the brand across R&D, manufacturing, and after-sales. So there should really be no major change current projected models to come from the automaker, which includes the Polestar 3 large e-SUV and Polestar 5 fastback sedan.
As to why Volvo has decided to let go of its stake in the company it co-founded, the Swedish automaker saw Polestar as it stands currently to be a drag on its resources. Volvo currently owns 48% of Polestar’s shares, whose values are down 83% since it went public in 2022.
Like other new EV brands and startups, Polestar has struggled to make headway in 2023, especially ever since Tesla started its price war last year. The fledgeling EV manufacturer announced last month that it has missed 2023 delivery targets, which had incidentally already been reduced from the start of the year.
Volvo explains that its decision to divest itself from Polestar will facilitate a further investments for developing technology to see it attempt to leader in next-generation mobility. The Swedish automaker further elaborated for this extra capital to go some way in seeing it experiment with Tesla-style mega casting, better electric motors and other new advancements in its manufacturing facilities.
Upon news that the Swedish automaker has stopped funding Polestar, Volvo’s own shares shot up by more than 40% following the announcement. This though might be a bit of a red herring, as Volvo also incidentally announced its 2023 financial report at that time, which incidentally saw it record its highest full-year retail sales, revenues and operating profit in its 97-year history.
In any case, getting back to the plight of Polestar, Geely has stated that it aims to continue in providing ‘full operational and financial support’ to the company moving forward. On its behalf too, Polestar has also expressed its enthusiasm for the prospect of Geely Sweden Holding becoming a new direct shareholder.
Thomas Ingenlath, CEO of Polestar, has commented, “With our expanding lineup of exclusive, high-performance cars, Polestar finds itself in one of the most promising phases of its development. We’ve successfully increased production and initiated sales in China, Europe, and Australia for the Polestar 4, and we expect the Polestar 3 to begin customer deliveries this summer. We eagerly anticipate further collaboration with Volvo Cars and the opportunity to leverage greater synergies with Geely on forward-looking technologies.”
