Volvo Cars shares surged 24% on Thursday as the Swedish automaker said it will stop providing funding to EV startup Polestar as it ramps up its own investment.
Volvo Cars said it’s “evaluating a potential adjustment to Volvo Cars’ shareholding in Polestar, including a distribution of shares to Volvo Cars shareholders” in which Geely
175,
would become a significant new shareholder in Polestar.
Volvo Cars
VOLCAR.B,
holds a 48% stake in Polestar
PSNY,
while Geely holds 79% of Volvo.
Polestar stock slumped 10% in premarket trade. “We look forward to continued cooperation with Volvo Cars as well as benefiting from even greater synergies with Geely on future orientated technologies,” said Polestar CEO Thomas Ingenlath in a statement.
Geely will continue to provide full operational and financial support to Polestar going forward, while Volvo Cars will extend the repayment period for an existing convertible loan.
Volvo and Polestar will still collaborate in research-and-development, manufacturing and other functions.
Volvo meanwhile said it’s changing its goals, still seeking an earnings before interest and tax margin above 8% for 2026, but on revenue between 550 billion and 600 billion Swedish kronor ($57 billion). The company’s 2023 margin excluding joint ventures was 6.4% on revenue of 399.3 billion kronor.
It said it will be boosting investments in electrification, software, core computing architectures, advanced connectivity, data capture and analytics, mega casting, next generation e-motor and battery technology, smart cabin technology, and a new advanced manufacturing facility.
For the next two years, it expects free cash flow generation to be relatively neutral.
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