Jul 12, 2021 - 11:29 am

Volvo increases stake in Polestar

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Volvo Cars announced the acquisition of additional shares in electric car brand Polestar, bringing the car company’s stake back up to 49.5 per cent. Meanwhile, a media report says that Polestar is currently negotiating an IPO.

First, on the increased stake in Polestar, Volvo Cars is acquiring its additional stake from private investment company PSD Investment, returning to the level of ownership it held prior to a private placement completed this year. PSD Investment is owned by Eric Li, chairman of both Volvo Cars and parent company Geely. According to an accompanying statement, PSD Investment will remain Polestar’s second-largest shareholder despite selling part of its stake.

Volvo Cars says it has no plans to increase its stake further. Polestar’s efforts to attract outside investors go back as far as early 2019 – and bore fruit for the first time this year, with a group of long-term financial investors pumping $550 million into the company via a capital increase in the spring. At the time, Polestar described the new investments and the associated diversification of its financing structure as prerequisites for future growth. The funds secured the expansion of available resources for product development and the accompanying acceleration of technological innovations “with a view to the market launch of several groundbreaking vehicles in the coming years”.

At the same time, Bloomberg, citing insiders, reports that Polestar is currently negotiating an IPO. Specifically, a possible merger with the stock market shell Gores Guggenheim is being discussed, which could bring the joint venture a valuation of around 25 billion US dollars. However, no agreement has been reached yet, the news agency writes further.

Polestar is owned by Volvo Car AB and Zhejiang Geely Holding Group, which is also the 100 per cent owner of Volvo Car. The company is based in Gothenburg, but all vehicles are built in China. With the Polestar 2 sedan, the manufacturer has developed a much-acclaimed electric car. However, there have been technical problems recently and already two recalls for the model. Nevertheless, the brand is seen as having great potential.

Polestar uses the manufacturing capacities of Volvo Cars. As recently announced, the Polestar 3 will in future be built at the Volvo Cars plant in Ridgeville in the US state of South Carolina. By the middle of the decade, production of future Polestar models will also take place in Europe.

volvocars.combloomberg.com

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Found on electrive.com
https://www.electrive.com/2021/07/12/volvo-increases-stake-in-polestar/
12.07.2021 11:43