- Volvo, which has held on to the Polestar name for many years, plans to relinquish ownership of the luxury EV brand.
- Polestar, both owned by Geely, said it would welcome direct ownership from a Chinese holding company amid weak sales in 2023.
- With the launch of the Polestar 3 and Polestar 4 just around the corner, the Swedish EV maker will need strong sales in 2024 to prove itself.
The collaboration between Volvo and Polestar was confusing to customers and parking attendants alike. Choosing the Polestar 2 or Polestar 3 from its Volvo siblings isn't all that difficult. When placed side by side, the similarities in design become obvious.
This is also not surprising. Polestar was originally a performance sub-brand of Volvo, but spun off from Volvo in 2017 as an independent electric vehicle manufacturer. These corporate strategies have been orchestrated by Volvo's China-based parent company Geely since 2010, with varying degrees of success for each brand. .
Polestar has updated the Polestar 2's drivetrain and range potential for 2024.
But as Volvo (slowly) launches its own EV suite, the relationship between the two brands, which tend to be seen as consumer-oriented, is bound to cause friction. The friction appears to have come to a head when Volvo Cars announced it would stop funding the Polestar business. Volvo Cars was previously a 48% shareholder in the electrical company, according to SEC filings.
Specifically, Volvo Cars executives are considering transferring ownership of Polestar to Volvo shareholders, which would make Geely the direct majority owner of the brand. Currently, Geely is Polestar's other major shareholder, previously accounting for approximately 39% of Polestar's shares.
“Geely Holding will continue to provide full operational and financial support to the independent and exclusive brand (Polestar),” a Geely Holding representative said in a statement. “This support does not require Geely Holding to reduce its stake in Volvo Cars.”
Polestar has also expressed interest in becoming a Geely-owned brand, particularly in a statement released today suggesting the parent company as a potential successor.
Polestar and Volvo share common platform for 2024 Volvo EX90 and 2024 Polestar 3 (On top of that).
Polestar CEO Thomas Ingenrath said: “Polestar is at one of the most promising stages of development as we have a growing lineup of premium performance cars.” “We look forward to continuing our cooperation with Volvo Cars and enjoying further synergies with Geely on future-oriented technologies.”
However, it is no secret that Polestar is struggling. Polestar's 2023 sales figures, which compete with brands like Tesla and Hyundai, show the brand is barely breaking even. Last year, Polestar delivered about 55,000 vehicles (including just 6,736 in the U.S.), a year-over-year growth rate of just 6%.
The brand had previously predicted annual sales of 80,000 units in 2023, but revised its forecast to a lower 60,000 units in November. In addition to a year of weak sales, Polestar has also been cutting back internally, announcing a series of layoffs last week. Approximately 450 jobs, or 15% of the current workforce, will be cut worldwide.
The bulk of Polestar's sales in 2023 came from the compact Polestar 2 sedan, which competes directly with Tesla's ever-popular Model 3. Amid Tesla-fueled price wars, inflation, and claims of shrinking EV demand, Polestar is pinning its hopes on the Polestar 3 crossover. (It is scheduled to go on sale to dealers early this year) to stimulate demand in the new year.
Polestar previously teased an 884 horsepower all-electric roadster concept scheduled for release in 2026.
Despite adding new blood to the model lineup, the discontinuation of Polestar has been positive for Volvo, with the company's stock up 32% at market open following the announcement. Meanwhile, Polestar's share price has fallen more than 83% since its listing in June 2022, raising further questions about the Swedish manufacturer's long-term viability.
Despite some production issues, Volvo's future seems to be in good hands, at least for now. From the authentic EX90 luxury crossover to the compact and technologically advanced EX30, his EV lineup for Volvo embodies the innovation that Volvo has long been known for. Volvo CEO Jim Rowan sees this as a positive opportunity for Polestar.
“Come on, Polestar…they have a very exciting future ahead of them. They've gone from a one car company to a three car company. They're launching two brand new cars soon. — actually in the first half of this year — and that will put them on a new growth trajectory,” Rowan said in an interview with CNBC earlier today.
Clearly, Polestar's future remains up in the air for now, with the brand working to launch new, more competitive models.
Which Abba song best describes Volvo and Polestar's parting ways? Share your thoughts below.
Originally from the Pacific Northwest and moved to New York, Emmett White has a passion for all things cars, bikes, airplanes, and motorcycles. Emmett worked in the motorcycle industry after he learned how to ride at the age of 17 and then joined Auto Week in 2022. Due to alternating parking issues, his vehicles are kept in moderation, with his 2014 Volkswagen Jetta GLI and his 2003 Honda Nighthawk 750 parked in a south Brooklyn community. .
