Volvo halts Polestar funding, handing responsibility to Geely
Swedish carmaker may cede its stake in EV company directly to shareholders, effectively handing control to Chinese firm
01 February 2024 - 11:57
byMarie Mannes
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A Polestar 2 is displayed at a car show in Oslo, Norway.
Picture: REUTERS
Swedish automaker Volvo Cars said on Thursday it will stop funding for PolestarAutomotive Holding,handing responsibility for the car brand to China’s Geely Holding.
Volvoholds a 48% stake in Polestar, while Geely owns 79% of Volvo, making it Volvo’s biggest shareholder. Swedish-listed Volvo’s heavy investment in Polestar has been criticised by analysts who see the stake as a drag on its resources.
Volvo said it has considered handing Polestar shares to shareholders, which would make Geely the controlling shareholder of the brand.
Like other new electric vehicle (EV) brands and start-ups, Polestar has struggled to make headway, particularly since Tesla started a price war last year. The automaker said earlier this month that it had missed its already reduced delivery targets for 2023.
Polestar’s shares are down just over 83% since it went public in June 2022 via a merger with a special purpose acquisition company.
Geely said in a separate statement it welcomed Volvo’s decision to focus its resources on its own development.
“Geely Holding will continue to provide full operational and financial support to the independent exclusive Polestar brand,” it added. “This support will not require a reduction of Geely Holding shareholding in Volvo Cars,” it added.
Polestar last week said it plans to cut about 450 jobs globally, or about 15% of its workforce, amid “challenging market conditions”.
Volvo reported a bigger-than-expected rise in fourth-quarter operating earnings,posting operating income excluding joint ventures and associatesof6.7bn kronor (about R12bn), up from 3.9bn kronor a year earlier.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Volvo halts Polestar funding, handing responsibility to Geely
Swedish carmaker may cede its stake in EV company directly to shareholders, effectively handing control to Chinese firm
Swedish automaker Volvo Cars said on Thursday it will stop funding for Polestar Automotive Holding, handing responsibility for the car brand to China’s Geely Holding.
Volvoholds a 48% stake in Polestar, while Geely owns 79% of Volvo, making it Volvo’s biggest shareholder. Swedish-listed Volvo’s heavy investment in Polestar has been criticised by analysts who see the stake as a drag on its resources.
Volvo said it has considered handing Polestar shares to shareholders, which would make Geely the controlling shareholder of the brand.
Like other new electric vehicle (EV) brands and start-ups, Polestar has struggled to make headway, particularly since Tesla started a price war last year. The automaker said earlier this month that it had missed its already reduced delivery targets for 2023.
Polestar’s shares are down just over 83% since it went public in June 2022 via a merger with a special purpose acquisition company.
Geely said in a separate statement it welcomed Volvo’s decision to focus its resources on its own development.
“Geely Holding will continue to provide full operational and financial support to the independent exclusive Polestar brand,” it added. “This support will not require a reduction of Geely Holding shareholding in Volvo Cars,” it added.
Polestar last week said it plans to cut about 450 jobs globally, or about 15% of its workforce, amid “challenging market conditions”.
Volvo reported a bigger-than-expected rise in fourth-quarter operating earnings, posting operating income excluding joint ventures and associates of 6.7bn kronor (about R12bn), up from 3.9bn kronor a year earlier.
Reuters
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