Volvo Cars increases stake in EV maker Polestar to 49.5%
Sweden's Volvo Car Group has bought additional shares in electric car maker Polestar, taking its holdings in the electric vehicle (EV) maker controlled by Volvo's parent company, the Chinese automaker Geely, to 49.5%.
The investment comes after Polestar raised $550 million in its first external funding round in April. "The move reflects Volvo Cars' strong conviction in Polestar's positioning and exciting potential in the high growth segment for premium electric vehicles," Volvo said in a statement.
Shares in Tesla are down 9% this year amid concerns of increased competition from traditional car makers in the production of electric vehicles.
The purchase sees Volvo's stake returning to the level it previously had, before the April funding round, when Polestar received a cash injection from Chinese investors Chongqing Chengxing Equity Investment Fund Partnership and Zibo.
Polestar builds hybrid performance cars in the western Chinese city of Chengdu and a sedan model at its Taizhou plant in the east. It also has a new model in development called Precept, a larger, more environmentally friendly sedan which it displayed at last year's China auto show.
Volvo said it had no further plans to increase its stake in Polestar beyond the 49.5% it now owns.