Volvo to cut Polestar funding

Volvo has announced that will stop funding Polestar and is planning to reduce its shareholding in the company.

Global investment interest in electric vehicles (EVs) is falling. Tesla shares have fallen by 30% this year, Renault recently confirmed it will not float its EV development arm Ampere due to a lower-than-expected valuation and Volkswagen has also delayed its plans to list shares in its battery manufacturing business.

Polestar has also struggled financially. Its shares have lost 84% of their value in the last year as the business failed to turn a profit and was forced to cut its delivery targets.

Up to 450 jobs are expected to be cut at Polestar, in order to reduce costs, according to Reuters.

Volvo owns 48% of Polestar, having founded the business in 2017 in partnership with Geely.

Jim Rowan, Volvo Cars’ chief executive, told the Financial Times Geely is “much more of a natural holding company” for Polestar.

In the UK market, Polestar's growth has been consistent. The brand registered 12,500 cars in 2023, up from 7,300 in 2022. It's core sales channel is true fleet, accounting for 93% of its registrations.

The company has recently expanded its line-up from a single model, adding the Polestar 4 to its range. Shortly, it will be joined by the Polestar 3, with both new models arriving on UK roads this year.