One of the most popular electric vehicle brands is set to lose funding from its parent company after falling sales and delivery delays.
In an announcement this morning, Volvo Cars said it would stop funding Polestar Automotive Holding in the near future.
The Swedish manufacturer said the luxury electric vehicle brand would be handed over to one of its largest shareholders – China’s Geely Holding.
As a result, Geely will continue to provide full operational and financial support to Polestar going forward.
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China's Geely Holdings is expected to take over control of the luxury EV brand
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Volvo Cars will no longer provide further funding to Polestar and will extend the repayment period for the existing convertible loan by 18 months to the end of 2028.
It acknowledged that the partnership between Volvo and Polestar had created huge benefits for both companies across research and development, manufacturing and sales.
Polestar has become wildly popular in recent years its vehicles having an impressive battery range without drivers needing to break the bank.
The recently unveiled Polestar 4 has a staggering 379-mile range and will see the rear window replaced with a camera as prices start from £59,990.
The Polestar 4 does not have a standard rear window
POLESTAR
Despite the optimism about the brand, sales have slumped due to driver uncertainty and other, more established brands like Tesla slashing prices to undercut rivals.
Polestar previously announced that it had missed its already-reduced delivery targets for 2023, with shares down over 83 per cent since going public in June 2022, Reuters reported.
Volvo said Polestar was entering “the next exciting phase of its journey” with a strengthened business plan and set for future growth, while focusing on its own future.
A Geely spokesperson commented on the update, saying: “Geely Holding will continue to provide full operational and financial support to the independent exclusive (Polestar) brand going forward.
“This support will not require a reduction of Geely Holding shareholding in Volvo Cars.”
Alongside the Polestar announcement, Volvo confirmed it had increased profits by 43 per cent to deliver a record year for the company.
It sold more than 708,000 cars in another all-time sales record, alongside revenues jumping by 21 per cent to £30billion (399 billion SEK).
Jim Rowan, chief executive of Volvo Cars, said: “2023 was a key milestone in our transformation journey.
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Polestar is attempting to create a carbon neutral car by 2030
PA
“We delivered a record-breaking year on many levels, reporting the highest retail sales, revenues and profits in our company’s 97-year history.
“We also took several significant steps forward in our ongoing transformation, while navigating a complex external environment. In doing so, we’ve built a solid foundation for 2024 and the years ahead.”