Volvo Cars saw its shares soar by more than 20% after announcing its decision to stop funding its subsidiary, Polestar Automotive. The Swedish automaker also reported a 10% year-on-year increase in net sales for the fourth quarter, reaching 148.1 billion Swedish krona ($14.16 billion) and bringing the full-year 2023 total to 552.8 billion krona. The adjusted operating income rose to 18.38 million krona from 12.17 million for the same period in 2022. The group revealed its plan to potentially transfer the management of struggling luxury car brand Polestar to its majority shareholder, China’s Geely Holding, which holds a 78.65% stake in Volvo, according to LSEG data. Volvo indicated that it is evaluating the possibility of adjusting its shareholding in Polestar, including a distribution of shares to Volvo Cars’ shareholders, potentially resulting in Geely Sweden Holdings becoming a significant new shareholder.
Volvo Cars CEO Jim Rowan, in an interview with CNBC, described the decision as a “natural evolution” in the relationship between the two carmakers. He emphasized the exciting prospects for Polestar, highlighting its expansion from a one-car company to a three-car company and the upcoming launch of two new cars in the first half of the year. Rowan also revealed Volvo’s intention to reduce its shareholding in Polestar and seek external funding in order to focus on its growth journey and necessary technology investments in the coming years.
Polestar, in a statement, expressed its approval of Geely Sweden Holding as a potential new shareholder and emphasized that Volvo Cars will remain a strategic partner in various areas. Polestar CEO Thomas Ingenlath conveyed optimism about the cooperation with both Volvo Cars and Geely, emphasizing the promising phase of development for the exclusive, performance car brand.
