Volvo seeks investors for its Polestar electric car brand
Swedish carmaker courts Chinese financiers and US tech investors
Stockholm — Volvo Cars is talking to Chinese investors as well as US tech investors as the company seeks external finance for its Polestar performance electric car brand, the Swedish carmaker’s CEO says.
Carmakers are having to strike partnerships to cut the burden and cost of building new electric and autonomous vehicles, while also grappling with the challenges of Washington’s trade war with China and sales delays due to new emissions regulations.
Volvo and Chinese parent Geely have each held a 50% stake in Polestar since 2017, when they agreed to jointly invest 5-billion Chinese yuan renminbi ($736m) to fund its initial development as a luxury electric car.
“There’s a big interest now to invest in the future of mobility and electrification and autonomous drive. So I think we have a very strong story with Polestar which is attractive to many,” Volvo CEO Hakan Samuelsson told journalists.
“We’re looking of course in Asia, China but also some known tech investors on the West Coast,” he said, adding that the fundraising could happen via a private placement and would depend on a good valuation and an attractive case.
Last month, Samuelsson told Germany’s Capital magazine that Polestar could tap financial investors as a precursor to a listing, but the company had also said then that there were no immediate plans to explore this.
“Right now we have the financing we need for the time being (for Polestar) ... We need funding to drive the very expensive development, so let’s see how fast that can happen,” he said.
On February 27, Polestar will unveil the Polestar 2, a sedan that Polestar has widely touted as competitor to Tesla’s Model 3 and also the first of five full-battery electric vehicles that Volvo has promised to deliver to the market.
Volvo has so far funded the development of electric and driverless cars in-house, but like other carmakers is battling a sales slowdown in Europe and China and higher costs due to the tariff war between Washington and Beijing.
In September, Volvo and Geely dropped plans for a listing of the Swedish company, with an estimated valuation of between $20bn and $30bn, due to trade tensions and an auto industry downturn.
Samuelsson said on Thursday the company was right now not planning to go public.