Volvo Cars is increasing its stake in Swedish electric-vehicle maker Polestar to 49.5% as part of ongoing efforts to move toward all-out electrification.
The deal, which is still subject to certain conditions, will see Volvo Cars acquire its additional stake from PSD Investment, the private investment company of Li Shufu, chairman of both Volvo Cars and its parent Zhejiang Geely Holding Group, Volvo Cars said in a statement on Monday. PSD Investment will remain the second-largest shareholder in Polestar if the deal is successful.
Established in 2017, Polestar, backed by Volvo Cars and Geely, has launched the plug-in hybrid Polestar 1 and all-electric Polestar 2, with plans to produce its recently announced third model, an SUV, at a Volvo plant in Ridgeville, South Carolina.
“The move reflects Volvo Cars’ strong conviction in Polestar’s positioning and exciting potential in the high-growth segment for premium electric vehicles,” Volvo Cars said in the statement.
In April, Polestar raised $550 million in its first external funding round led by Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment to finance product development.
Volvo Cars said it has no plans to further increase its stake in Polestar beyond 49.5%.
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