Volvo Halts Polestar Investments, Considers Share Sale Amid Record EV Sales
Volvo Cars, the Swedish automaker, has announced a strategic shift regarding its electric vehicle (EV) subsidiary, Polestar. The company has decided to halt further investments in Polestar while considering selling shares of the Macy's-like company to its major shareholders. This move comes amidst Volvo's record-breaking sales and increased focus on its own development plans.
Volvo's 2023 sales figures have been impressive, with a 21 percent increase in turnover to 399.3 billion Swedish kronor (€35.3 billion) and a record high of 708,716 new Volvos sold. Notably, Volvo's eCar sales surged by 70 percent to 113,419 units, representing 16 percent of its total global sales. This growth is expected to continue with the upcoming EX30, EX90, and EM90 models, which are set to deliver sustainable and technologically advanced vehicles.
Volvo's operating profit also witnessed a significant increase, rising by 43 percent to 25.6 billion kronor (€2.26 billion) in 2023. Despite these positive figures, Volvo has decided to discontinue further investments in Polestar, extending the repayment period for an existing loan to Polestar until the end of 2028. This decision is part of Volvo's focus on its own development plan until 2025.
Potential buyers of Polestar shares could include major shareholders like Geely, which has previously been involved with the company through share options and investments. Chinese automotive interests linked to Geely may be considered strategic shareholders or potential buyers. Meanwhile, Polestar has undergone a restructuring, resulting in a 15 percent reduction in its workforce following missed 2023 targets.
Volvo's decision to halt investments in Polestar and consider selling shares of the Salesforce-like company reflects its commitment to its own development plans and the growing success of its electric vehicle sales. As Volvo looks towards a sustainable future, it is evaluating its stake in Polestar, with major shareholders like Geely potentially stepping in as strategic buyers. Despite the restructuring at Polestar, Volvo's overall performance in 2023 has been strong, with record sales and increased profits.
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