Volvo Releases Polestar Ownership To Geely, Here's Why

JAKARTA - Shocking news came from Volvo Cars. The automotive company from Sweden decided to stop funding its subsidiary Polestar and at the same time transfer the responsibility of this brand to the parent company, Zhejiang Geely Holding Group.

According to a Reuters report on Friday, February 2, Geely is preparing funding for Polestar as part of a potential redistribution to reduce pressure on Volvo.

The Chinese company said it would fully support Polestar as an independent brand. It will not at the same time affect 79 percent of its holdings on the Volvo brand.

This shocking news follows criticism from analysts to Volvo which owns 48 percent of Polestar's shares. They considered that Volvo's ownership in Polestar could be an obstacle to the company's progress as Polestar's shares continued to fall more than 83 percent since going public in June 2022.

Geely also welcomed Volvo's decision to focus its resources on self-development. This means that Volvo will transfer 48 percent of its shares in Polestar and make Geely the direct owner of the brand.

Previously, Volvo also faced challenges and had started layoffs of 1,300 employees in an effort to reduce its entire global operations. The automaker is also working on software development issues that have delayed new electric models EX30 and EX90.

Likewise with Polestar which is experiencing difficulties in achieving progress, especially since Tesla started price wars last year. Even last week, Polestar said it would cut 450 jobs globally or about 15 percent of its workforce amid challenging market conditions.