Volvo’s stock surged 26% after announcing it would cease funding its electric vehicle subsidiary, Polestar Automotive.
This decision reflects a broader trend in the electric vehicle industry, with Renault canceling its electric-car unit IPO and Ford reducing production of its electric F-150 Lightning.
Volvo plans to focus on its in-house electric vehicle development and may divest its 44% stake in Polestar.
“Obviously, we spun out Polestar as a separate company a long time ago, and since then we’ve been incubating and working with Polestar for a number of years,” Volvo Cars CEO Jim Rowan said.
While Polestar’s CEO remains optimistic about the company’s future, its shares declined by 84% in 2023 due to the EV market slowdown.
“Now, Polestar … they’ve have got a very exciting future ahead of them, they’ve moved from being a one-car company to a three-car company, they’ve got two brand-new cars coming out very shortly, in fact in the first half of this year, and that’s going to take them to a new growth trajectory,” he added.
“With our growing line-up of exclusive, performance cars, Polestar is in one of the most promising phases of its development,” Polestar’s Thomas Ingenland said.
