The former performance arm of Volvo, now a separate company, still relies on funding, which until now was flowing from Volvo. As EV sales seem to slow down for some manufacturers, Volvo is looking to cut down its expenses and wants to shed Polestar’s shares.
Polestar claims it made huge progress; for an essentially new company, it already has three vehicles on sale across a bunch of global markets. According to its CEO, the company is on its way to being profitable in 2025. While that’s great news, it needs another €1.21 billion to get there. And that’s when it gets interesting.
Polestar is owned by Geely and Volvo, with the latter holding 48% of the shares. With Volvo struggling to rein in rising costs, the company has already let go of 1,300 employees, but it wants to fully focus on EVs, which means it needs more money. The plan is simple: offload some of its 48% stake in Polestar and let the young offshoot be even more independent.
Unsurprisingly, Geely is stepping in, and its billionaire owner, Li Shufu has already confirmed it will pick up the tab. Geely owns 79% of Volvo and the remainder of Polestar, which makes even a big move like this similar to taking money out of one pocket and putting it back into the other.
The market has responded, with Volvo’s shares jumping 30% after the announcement. This is good news both for Volvo and Polestar, with the latter being given a chance to spread its wings a bit more. Polestar’s shares have been falling ever since the company went public; they started at $9.76 in May 2021 and are now sitting at a lowly $1.93.
The EV market is alive and well, contrary to what some would like us to believe. Yes, the legacy automakers seem to struggle to shift their EVs; Renault just pulled the plug on the Ampere IPO, and VW did the same with the PowerCo IPO. GM is going back to making more plug-in hybrids, and Toyota says EVs won’t matter much. All that while Europe trembles in the face of Chinese imports, the Chinese EV market is growing faster than the rest of the world put together, and the Tesla Model Y becoming the best-selling car globally.
Also See: Polestar Wants To Make Cars Part Of The Power Grid
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