Volvo is Breaking Up With Polestar - Mostly
Volvo spun off Polestar years ago, but the Chinese-owned Swedish automaker has been footing part of the bill for Polestar’s operations since then. Things are changing for Polestar, however, as Volvo will hand the brand over to parent company Geely to focus on its growth and stability.
Volvo owns almost half of Polestar’s shares, but the automaker has taken flak from analysts who thought the company had too much involvement with Polestar. The stock market agreed, with Volvo shares climbing up to 30 percent after the announcement.
Polestar has relied on Volvo and Geely for funding and support, but this transition won’t happen overnight. Instead, it will happen gently, and Geely will support Polestar as an independent brand going forward. Volvo will still help with manufacturing, research and development, and service, but this is a surprising move nonetheless.
Though Polestar has a slew of interesting EVs on the horizon, the company recently announced layoffs of up to 15 percent of its workforce. It also needs big money - $1 billion – to stay in business for the next year.
For Volvo, this decision will help it focus more on its upcoming EV rollouts, which have been plagued by software-related delays. There’s also the elephant in the room, EV demand, which threatens to become a significant speed bump for the entire industry.
[Image: Polestar]
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
More by Chris Teague
Comments
Join the conversation
Volvo sees the future:
Volvo, An Early Electric Car Adopter, Cuts Off Funding For Its EV AffiliateMove follows other retrenchments by big automakers as sentiment turns against EVs
Gotta break it off with the polestar before one's partner finds out.
China saves the world, again.
Wait, never mind......
Volvo is continuing with electrification though so I'm not sure this is an indicator of much of anything unless that changes. Perhaps they figure they'll have more success with the known nameplate. This is more akin to Ford killing Lincoln (looks more and more likely), absorbing their products (not that that is difficult at this point) and trimming the redundant sales channels.