Geely founder Li Shifu invests $200 million in Polestar
As part of the deal, Polestar will sell over 190 million newly issued Class A American Depositary Shares (ADS) to PSD Investment at a price of USD 1.05 per share. The deal increases PSD Investment’s stake in Polestar to 44 per cent, while Li Shufu controls a total of 66 per cent of the shares, split between PSD Investment and a Swedish subsidiary of Geely.
This further cements Geely’s dominant role in Polestar. The Volvo Cars Group, which is 79 per cent owned by Geely and once held a significant stake in Polestar, will reduce its share in Polestar to 16 per cent (previously 18 per cent) as a result of the capital measure. The bottom line is that Polestar, including the Volvo shares, is now around 80 per cent owned by Li Shufu’s empire.
Volvo Cars had already reduced its stake in Polestar from 48 to 18 per cent in 2024 and passed the shares on to its shareholders, and thus primarily to Volvo’s major shareholder, Geely. It was only through this step that Polestar became an independent member of the Geely Group, as Geely had not previously held a direct stake in Polestar.
Nevertheless, Polestar, which was once a tuning division of Volvo and now builds its own electric cars, continues to cooperate with Volvo: in February 2025, it was announced that Polestar is now also using Volvo’s dealer network in parallel with its own online sales in order to achieve its targeted growth.
Geely itself is one of the largest Chinese automotive groups and holds shares in several global brands, including Volvo, Lotus, Lynk & Co and Smart. The close integration with Polestar secures Geely’s strategic access to the premium electric car market in Europe and North America.
Economic situation: Between innovation drive and financing pressure
Despite a high-quality product portfolio – including the Polestar 2, the Polestar 3 SUV and the Polestar 4 crossover coupé – Polestar, like many other electric car manufacturers, is struggling with a weak market environment. Last year, sales fell from 52,796 vehicles in 2023 to 44,851 electric cars despite new models. Global sales of electric vehicles have fallen short of expectations in recent quarters, due to geopolitical uncertainties as well as increasing competition and falling purchase premiums.
The capital increase is therefore also a sign of economic necessity: Polestar needs the funds to cover its operating capital requirements and for general corporate purposes. The company had already taken out various bank loans in 2024 to maintain liquidity and secured a credit line of 450 million dollars in March 2025.
The new models announced, including the Polestar 5 (a four-door GT model) and the Polestar 6 Roadster, require investments in development, production and market launch. The Polestar 7, a compact SUV model, is also to be manufactured in Europe from 2026.
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