Image source: Polestar
Volvo Car Group announced Monday that it will raise its stake in electric car maker Polestar to 49.5%.
In a statement, Volvo said it is acquiring the additional shares from PSD Investment, the private investment company of Eric Li, chairman of Volvo Cars and its parent, Zhejiang Geely Holding Group (OTC: GELYY ).
PSD Investment will remain the second largest shareholder in Polestar.
“The move reflects Volvo Cars’ strong conviction in Polestar’s positioning and exciting potential in the high growth segment for premium electric vehicles,” the Swedish automaker said.
The announcement follows a Bloomberg News report last week that Polestar is in talks to go public through a merger with special purpose acquisition company Gores Guggenheim in a deal that could value the combined company at $25 billion.
Since being formed as a joint venture of Volvo and Geely in 2017, the Sweden-based Polestar has opened a manufacturing facility in China, built a global sales and distribution system and brought two vehicles to market.
Last month, Polestar announced that it will manufacture its first all-electric sport utility vehicle in the US at a plant it shares with Volvo in South Carolina.
Polestar plans to open more than two dozen retail spaces across the US and, by mid-decade, expects production of future electric models in Europe.
The company raised $550 million in its first-ever outside investment round in April 2021.
Volvo Cars, which had owned 50% of Polestar before that deal, said that it has no plans to increase its stake beyond 49.5% or to consolidate the EV maker.
Source: Equities News