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KEY TAKEAWAYS
- Volvo said it will no longer provide financial support for Polestar, an EV maker.
- Volvo is considering restructuring its ownership in Polestar, and could hand over its stake to its Chinese parent Geely.
- Volvo’s pullback marks the latest retrenchment by an auto firm of its EV ambitions.
Sweden’s Volvo said it would stop funding electric vehicle (EV) maker Polestar ( PSNY ), in the latest pullback by automakers of their EV forays.
Volvo said it is considering restructuring its ownership in Polestar, and could hand over control of its stake to China’s Geely ( GELYF ), Volvo’s parent. “This may result in Geely Sweden Holdings becoming a significant new shareholder,” Volvo said.
Volvo’s withdrawal from Polestar marks the latest retrenchment by automakers from their EV ambitions, amid slowing demand for EVs in the U.S. and heightened competition from Chinese EV makers.
Ford Motor ( F ) said last month it is scaling back production of its electric F-150 Lightning truck as EV demand slows. Tesla has also been cutting prices on its EVs to stimulate demand and its stock price is down 25% so far this year.
Volvo said it will remain a strategic partner of Polestar’s in research and development, manufacturing, sales, and service. The Swedish company has its own in-house EV operations.
Polestar reported an adjusted operating loss of $735 million for the nine months ended Sept. 30, 2023.
Polestar, which was listed through a special purpose acquisition company on the Nasdaq in 2022, fell more than 11% in early trading Thursday following the news. It has lost over 90% of its value since going public.