Volvo Cars to Take a Bigger Stake in Electric-Performance Brand Polestar
Swedish automaker Volvo Cars is acquiring additional shares in electric electric performance vehicle brand Polestar, the automaker announced on Monday. The additional shares in Polestar will increase Volvo Cars' stake to 49.5%.
Polestar is the new EV brand operated by Volvo Cars and its parent company Chinese automaker Zhejiang Geely Holding Group Co (Geely). The new Polestar brand leverages the manufacturing capabilities of Volvo Cars and Chinese automaker Geely.
The move reflects Volvo Cars' strong conviction in Polestar's potential in the high growth segment for premium electric vehicles that's currently dominated by Tesla.
Volvo Cars and Geely established Polestar as a standalone electric vehicle brand in 2017. Volvo Cars owned 50% of Polestar until a private placement earlier this year diluted its shareholding in the company. Through this transaction, Volvo Cars' share returns to its previous level of close to 50%.
In April, Polestar announced it raised $550 million in its first ever outside investment round. The private placement of newly issued shares was from a group of long-term financial investors. The financial details of the transaction were not disclosed.
Volvo Cars is acquiring its additional stake from PSD Investment, the private investment company of Eric Li, Chairman of both Volvo Cars and its parent company Geely. PSD Investment will remain the second largest shareholder in Polestar.
Volvo Cars said it has no plans to increase its stake further or to consolidate Polestar.
Polestar's first mass-market EV is the Polestar 2. Last month, the company announced that its next vehicle, an electric SUV named the Polestar 3, will be built in the U.S.
The upcoming Polestar 3 will be manufactured at the Volvo Cars production center in Ridgeville, South Carolina. All of the Polestar 3 vehicles built in South Carolina will be sold in the U.S., the company said.
The Ridgeville plant was first opened in 2018 by Volvo Cars. The plant is currently the production home of the Volvo S60 mid-size sedan. The facility will produce the next generation Volvo XC90 sport utility vehicle around 2022. The plant has the capacity to produce up to 150,000 cars annually.
By mid-decade Polestar expects production of future electric models in Europe.
The Polestar 2 is rated at 400 horsepower and delivers sportscar-like performance. It can go from zero to 60 mph in about five seconds.
The Polestar 2 is also the world's first EV to feature an infotainment system powered by Google's new Android Automotive OS. Popular Google services, including Maps, Play and Assistant are embedded in the vehicle's infotainment system, so there is no need for an owner to sync their smartphone.
Like Tesla's direct to consumer sales model, Polestar will not have a traditional network of dealerships. The retail locations called "Polestar Spaces" will serve as showrooms where customers can learn more about the brand and Polestar 2.
In March, Polestar announced that it's expanding its retail presence across the United States with plans to open new retail showrooms in 15 cities by the end of 2021.
In the first half of 2021, Polestar said it will open new Polestar Spaces in Austin, Texas, Boston, Denver, Seattle, South Florida and Washington D.C.
Polestar said it plans to use its retail network to sell about 50,000 electric vehicles a year by 2023.
The additional acquisition by Volvo Cars is scheduled to complete soon, but is still subject to certain conditions.
- Lucid Group Announces Bank of America as its Preferred Lender to Support the Ownership Experience
- Waymo Has Tens of Thousands of San Francisco Residents on a Waitlist to Take a Ride in One of its Robotaxis
- Electric Truck Maker Rivian Selects Amazon Web Services as its Preferred Cloud Provider
- BMW i Ventures Leads Series B Funding Round of Cambridge, Massachusetts-based Nanocoating Technology Company actnano Inc.
- Rivian Notifies Reservation Holders That the R1S Electric SUV Will Be Delayed Until Mid-2022
- XPeng Announces its Q3 Financial Results, Continues to Post Record EV Sales
- General Motors Invests in Seattle-based Electric Boat Maker Pure Watercraft
- Amazon Driver Reports 40% Faster Battery Drain When Using Climate Controls in Rivian’s Electric Delivery Van, The Information Reports