Volvo sells Polestar shares to Geely

This came as a surprise: On February 1, 2024, Polestar announced in a short press release that Volvo, as Polestar’s largest shareholder, would divest itself of its shares. At that time, Volvo’s stake in Polestar was 48.5 percent. The buyer has already been identified, it is Zhejiang Geely Holding Group Co. Ltd, or Geely for short.

On February 22, Volvo reported “completion” at that time. Accordingly, Volvo’s share in Polestar will be reduced to 18 percent. Geely will take the remaining share. This means that Polestar will also be managed as an independent brand within the Geely group. Polestar CEO Thomas Ingenlath said: “Our relationship with Volvo Cars remains. Our customers will continue to benefit from our existing partnership, including in the areas of sales and customer service, which ensures safety and stability.”

The Polestar continues to be available at Volvo dealers

The close relationship with Volvo will remain unchanged, Volvo dealers will continue to service Polestar vehicles and Volvo will remain a strategic investor in Polestar with an 18 percent stake. The company also agreed to extend a $1 billion loan until 2028.

Geely has been the parent company of Volvo since 2010. By transferring most of Volvo’s shares to Geely, the financing of electric car maker Polestar is meant to be improved and the burden will be lifted from Volvo. Polestar made big losses again in 2023 and needs new capital. This currently appears to be secured (as of February 29, 2024): Polestar announced a major loan of 950 million US dollars (currently around 876 million euros), which the brand will receive from the banking consortium.

Big credit and job cuts

Financing will be provided by a total of twelve international banks, including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB, in the form of a three-year loan. Polestar sees this as covering its future financial needs, and the brand is sticking to its goal of being in the black for the first time in 2025.

To further improve profits, Polestar looks set to cut jobs significantly, with a quarter of its workforce set to go. According to Polestar’s press release, ten percent of jobs have already been cut in 2023, and a further 15 percent of workers will be cut in 2024. According to Polestar, this “deep efficiency plan” will, according to Polestar management, you will make the goals of 2025 reachable: to reach the break-even point, sales of more than 155,000 cars per year and a large amount “in high youth”.

Polestar had revised down its targeted sales figures several times in 2023, the brand was able to deliver around 54,600 vehicles worldwide; The start of sales of other models such as the Polestar 3 SUV was delayed. Even after the share transfer, which is known as a “shareholding adjustment,” Volvo says it will continue to remain “a strategic partner of Polestar in the areas of research and development, production, customer service and sales.”