Volvo ends Polestar funding, as EV startup struggles
Volvo will stop funding Polestar and is considering a move that could give parent Geely greater control of the EV brand, Reuters reported Thursday.
The news comes after Polestar announced that it missed already-reduced 2023 delivery targets. The brand’s shares are also down 83% since it went public in June 2022 via a merger with a special purpose acquisition company (SPAC).
Volvo owns a 48% stake in Polestar, which the automaker is reportedly considering turning over to its shareholders. Geely owns around 80% of Volvo, so this would give the Chinese automaker more direct control over Polestar. It might also make it easier for Geely to sell down its stake in Volvo in the future, Reuters noted in a separate report, adding that the Swedish automaker’s stock hasn’t performed especially well since a 2021 initial public offering (IPO), either.
In an interview with CNBC, Volvo CEO Jim Rowan called the move a “natural evolution” for Polestar, saying the time was right to look for other sources of funding for the brand to continue its growth. For now though, the two brands are connected by more than just stock ownership.
In the U.S. Polestar has been able to take advantage of Volvo’s dealer service network. With more distance between the brands, that may cast some uncertainty into whether the arrangement will continue.
2024 Polestar 2 single motor
Polestar has been pulling in its own direction already, with plans to make its own motors and other propulsion components. The brand’s next model, the Polestar 3 SUV, still shares many components with the Volvo EX90, though. Both models have been delayed by software issues.
That leaves the Polestar 2 as the brand’s only model for now, but it’s been steadily improving. The 2024 Polestar 2 marks a switch to rear-wheel-drive and rear-wheel-biased, and it’s a better car than what originally arrived.