Volvo Cars is set to boost its stake in Polestar by converting approximately $274 million in credit into shares, with a second $65 million conversion scheduled for the second quarter of 2026. This will raise Volvo’s holding to around 19.9%, signaling closer collaboration with Polestar, both majority-owned by Geely Holding.

The transaction supports the concentration of Polestar 3 SUV production at Volvo’s Charleston, South Carolina plant, while production in China will be phased out due to weak demand and high export tariffs.

Upcoming models, including the 2028 Polestar 7 SUV, will be manufactured at Volvo’s Slovakia facility, emphasizing regional production and localization.

Polestar CEO Michael Lohscheller highlighted the ongoing operational partnership with Volvo, which leverages shared manufacturing, commercial operations, and an extensive service network.

The strategy aims to reduce costs, enhance scale, and optimize EV production across Geely brands, while Polestar continues to manage typical startup liquidity pressures.

In addition, Volvo will become the exclusive distributor of Lynk & Co vehicles in Europe, further strengthening synergies across the group.