Funding and control of Polestar is shifting.
On Thursday Volvo announced it is shifting “full operational and financial support” of its Polestar subsidiary to Chinese-owned Geely. Volvo itself is a subsidiary of Geely, which snapped up the Swedish automaker from Ford in 2010.
Volvo and Geely never fully merged, but the two automakers deeply collaborated on powertrains, vehicle platforms, sales, self-driving technology, and infotainment systems.
Polestar uses and benefits from all the above. The upcoming Polestar 3 electric crossover SUV shares its platform with the Volvo EX90, while the Polestar 4 rides on a Geely-based platform.
With the move, Volvo in a press release said “Polestar is entering an exciting phase with a strengthened business plan and positioned for future growth.” The startup subsidiary has been a burden on Volvo’s books and dragged down investor confidence.
The Swedish automaker said it will no longer provide funding to Polestar, but the two companies will continue to collaborate across R&D, manufacturing, after sales, and commercial aspects of business.
Reuters reported the announcement sent Volvo’s stock up more than 30% at market opening. Polestar went public on the Nasdaq as PSNY in 2022, but shares have lost 83% of their value since then.
Polestar missed its reduced delivery targets for 2023, but CarsDirect reported on Wednesday that 2024 Polestar 2 orders have already closed due to “high demand.”
Geely said it “continue to provide full operational and financial support to the independent exclusive (Polestar) brand going forward.”
