Volvo’s stock rose by 26 percent after announcing it would stop funding its electric vehicle subsidiary, Polestar Automotive.
This news comes amidst a rocky start for electric vehicles in 2024, 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 development and may divest its shares 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.
“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 said.
Despite Polestar’s struggles since going public, its CEO remains optimistic about the company’s future, despite a reported 84 percent drop in shares in 2023 due to the general EV market slowdown.
“With our growing line-up of exclusive, performance cars, Polestar is in one of the most promising phases of its development,” CEO Thomas Ingenland said.
