Recently, we reported that Polestar did not reach set sales targets for last year and that the major bank SEB classified Polestar as worthless during an analysis. Polestar’s decline affects Volvo Cars, which has a large stake in the electric car manufacturer, which it has supported financially for several years.
Now Volvo Cars wants to bring about changes. On Friday, Volvo presented a proposal for the distribution of 62.7 percent of the company’s shares in Polestar, worth SEK 9.5 billion, to its shareholders. If the proposal is approved at the annual general meeting on March 26, it means that Volvo Car’s shareholding will be reduced to 18 percent.
Volvo Cars writes in a press release that the company will focus its resources on the next phase of its transformation (to become a purely electric car manufacturer) and that they will therefore no longer provide financial support to Polestar.
– As we now begin the next step in our transformation and gear up to become a leader in next-generation mobility, our focus on Volvo Cars’ development increases. The proposed distribution positions Volvo Cars strategically and gives our shareholders direct exposure to Polestar shares. As we have significant operational collaborations with Polestar and a financial relationship, it is logical for us to retain influence through a smaller 18.0 percent stake in Polestar. That being said, Volvo Cars will not be providing additional funding to Polestar. With Polestar’s strengthened business plan, the launch of Polestar 3 and Polestar 4 and with Geely’s commitment and support, the company is well positioned for growth, says Jim Rowan, President and CEO of Volvo Cars.
3 is an important model that, together with 4, is supposed to make Polestar take off. More about the car in the video above and the entire test drive via the link below. Photo: Polestar
Instead, it will be Geely Holding Group, which backs Volvo’s proposal for replacement, which will support Polestar both financially and operationally.
– We express our support for the proposed distribution of Polestar shares to Volvo Cars shareholders. We have great confidence in Polestar and look forward to 2024 with great optimism based on the strong and attractive product portfolio that confirms Polestar’s position as a global premium brand in electric cars. As long-term owners of Polestar, we are committed to supporting their announced business plan and financial goals by securing the funding required to execute the strategy, and through our global ecosystem of technology, supply chain and product development. At the same time, this enables Volvo Cars to fully focus on its transformation and invest in developing Volvo Cars, says Daniel Donghui Li, CEO of Geely Holding Group.
Trial run
