Volvo said it is ready to call it quits on Polestar and is prepared to stop funding the company altogether while simultaneously handing over responsibility to Geely, the Chinese company that is the parent company of the Swedish automaker.
Volvo owns roughly 48 percent of Polestar’s shares, but it has long been an overhang on the company’s stock, according to some analysts.
It is no secret that Polestar has struggled to be an efficient investment for shareholders, nor has it been an overwhelmingly stable competitor to the largest EV makers out there. Like all EV companies, there is a painful growth period that can prove to be extremely challenging, and it usually results in bankruptcy.
Polestar missed reduced delivery targets for 2023 but did report 6 percent growth in 2023 from the year prior.
It also has started ramping up production of the Polestar 4 in China and said the vehicle is “well received.”
However, Volvo does not seem encouraged that it is a smart investment moving forward.
Volvo is ready to hand over its control of Polestar to Geely because its shares are down 83 percent since June 2022, when Polestar used a SPAC to go public. It said that it has thought about handing shares of Polestar over to shareholders, which would make Geely a direct owner of the brand, according to Reuters.
“Geely Holding will continue to provide full operational and financial support to the independent exclusive (Polestar) brand going forward,” the company said in an announcement. “This support will not require a reduction of Geely Holding shareholding in Volvo Cars.”
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