Volvo Car Evaluating Potential Reduction of Shareholding in Polestar — Update

By Dominic Chopping

STOCKHOLM--Volvo Car is evaluating reducing its shareholding in Polestar and will no longer provide further funding to the electric-car maker, it said Thursday.

Polestar was founded by Volvo Car and China's Geely and completed a special-purpose acquisition company merger and listed on Nasdaq in 2022. Volvo Car has provided Polestar with loans totaling $1 billion and said it will extend the repayment period for the existing convertible loan by 18 months to the end of 2028.

As it moves into the next phase of its transformation, including deploying large-scale investments in the creation and adoption of new technologies and production facilities, Volvo said its focus is on developing the company and concentrating its resources on its own needs.

"We are therefore evaluating a potential adjustment to Volvo Cars' shareholding in Polestar, including a distribution of shares to Volvo Cars' shareholders," it said. "This may result in Geely Sweden Holdings becoming a significant new shareholder."

Geely is Volvo Car's major shareholder.

The company posted a rise in fourth-quarter revenue driven by higher volumes and said it expects the growth rate in retail sales to increase this year as long as there are no major disruptions.

Net profit attributable to shareholders rose to 3.11 billion Swedish kronor ($299.2 million) from SEK2.46 billion a year earlier, as revenue rose 4% to SEK109.44 billion.

Analysts polled by FactSet had projected a net profit of SEK4 billion on revenue of SEK108.35 billion.

"We remain firm on our ambition to report an Ebit margin above 8% for 2026, and now do so based on expected revenues between SEK550 billion-SEK600 billion," Chief Executive Jim Rowan said.

"By the end of 2026, this calculates to a revenue compound annual growth rate of 11%-15% from 2023 to 2026."

In terms of total 2024 retail deliveries, Volvo aims for a higher year-over-year growth rate than in 2023.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

February 01, 2024 02:44 ET (07:44 GMT)

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