Volvo investing heavily to secure future growth.
Volvo has made the decision to end its financial support towards Polestar, a former performance sub-brand that established itself as an independent electric vehicle (EV) brand in 2017.
A press release was issued by Volvo, celebrating their impressive sales in 2023. In light of their future goals, the Swedish car manufacturer disclosed their plans to assess their current ownership in Polestar, with a possibility of Geely taking over financial control of the electric vehicle brand. However, it was also confirmed that the Chinese auto conglomerate will continue to offer complete operational and financial assistance to Polestar going forward.
Under its corporate umbrella, Geely boasts a diverse portfolio of brands, such as Volvo Cars, Polestar, Lynk & Co., Lotus, Smart, and London Electric Vehicle Company. Additionally, Geely holds a considerable stake in other major automotive companies, including 9.69% ownership in Mercedes-Benz, 6.8% in the Volvo Group, and most recently, 17% in Aston Martin.
Volvo has announced that it will no longer provide funding for Polestar, citing significant investments in its future as the main reason. This shift towards the future is centered around electrification, as evidenced by Volvo’s plans to release more electric vehicles in the near future including the EX30, EX90, and EM90 models.
Volvo stated, “As we progress into the next stage of our transformation, which involves implementing significant investments in the development and integration of cutting-edge technologies and modernized production facilities, our primary objective remains centered on advancing Volvo Cars and directing our efforts towards our own ambitious journey.”
Despite this, it does not entail the end of the partnership between Volvo and Polestar. The car manufacturer made it clear that their cooperation in research and development, production, customer service, and marketing will persist and bring advantages to both companies.
The Polestar brand is projected to maintain its path without relying on financial support from Volvo. The complete release of the Polestar 3 and 4 is anticipated in the near future, with the latter arriving in the United States this year. This launch will feature self-driving technology that aims to rival Tesla’s infamous Full Self-Driving software.
The business has decided to lower its projected external funding to around $1.3 billion while aiming to achieve a neutral cash flow in the year 2025.
Polestar CEO, Thomas Ingenlath, expressed excitement about the current phase of development for the company, stating, “With our expanding selection of high-performance vehicles, Polestar is in a highly promising stage. We have effectively increased production and launched sales in China, Europe, and Australia for the Polestar 4. Furthermore, we anticipate the first customer deliveries of the Polestar 3 to begin this summer. We are eager to continue our collaboration with Volvo Cars and to capitalize on increased synergies with Geely in the development of cutting-edge technologies.”
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