Volvo spun off Polestar years ago, but the Chinese-owned Swedish automaker has been footing part of the bill for Polestar’s operations since then. Things are changing for Polestar, however, as Volvo will hand the brand over to parent company Geely to focus on its growth and stability.
Volvo owns almost half of Polestar’s shares, but the automaker has taken flak from analysts who thought the company had too much involvement with Polestar. The stock market agreed, with Volvo shares climbing up to 30 percent after the announcement.
Polestar has relied on Volvo and Geely for funding and support, but this transition won’t happen overnight. Instead, it will happen gently, and Geely will support Polestar as an independent brand going forward. Volvo will still help with manufacturing, research and development, and service, but this is a surprising move nonetheless.
Though Polestar has a slew of interesting EVs on the horizon, the company recently announced layoffs of up to 15 percent of its workforce. It also needs big money – $1 billion – to stay in business for the next year.
For Volvo, this decision will help it focus more on its upcoming EV rollouts, which have been plagued by software-related delays. There’s also the elephant in the room, EV demand, which threatens to become a significant speed bump for the entire industry.
[Image: Polestar]
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