Volvo seeking capital injection for Polestar electric vehicle sub-brand
11 February 2019
11 February 2019
Volvo Cars is currently holding talks with Chinese and US investors to generate additional capital for its Polestar electric vehicle sub-brand. Meanwhile, the subsidiary has announced that the Polestar 2, the brand’s first all-electric model, will be officially presented on February 27.
Volvo CEO Hakan Samuelsson said in an interview: ′We need funding to drive the very expensive development so let’s see how fast that can happen.’ To date, Volvo has financed the development of electric and autonomous vehicles out of its own pocket, but in the long run it will prove near impossible to keep up with the market. Samuelsson also stressed that external funds play a major role in financing new electric vehicles.
Volvo and its Chinese parent company Geely each hold 50% of Polestar. Together, they made an initial investment of €650 million to initiate the construction of luxury electric cars. The brand’s medium-term goal is to produce 50,000 to 100,000 cars a year – including the Polestar 1 hybrid model, the fully electric Polestar 2 and an electric SUV that is also planned.
Volvo has so far funded the development of electric and driverless cars in house, but like other carmakers is battling a sales slowdown in Europe and China.
Samuelsson said that external funds raised would play a big role in financing the cost of building new electric vehicles. ′Right now we have the financing we need for the time being [for Polestar]… We need funding to drive the very expensive development so we will see how fast that can happen,’ he said.
′The end game for Polestar is to have a company where we [Volvo] would be a big dominant player, but the rest would be open for various financial investors,’ Samuelsson said. ′Long term, an IPO could also be an option. However, it is not something we are planning right now.’
To support its strategy of increasing independence, and to strengthen its global finance team, Polestar appointed a new Group CFO and Deputy Group CFO. Ian Zhang joined the manufacturer as the new Group Chief Financial Officer on 1 January from his current position as Deputy Group CFO for Zhejiang Geely Holding Group.
While series production of the Polestar 1 is scheduled to start in Chengdu, China, in the middle of this year, the Polestar 2 is now scheduled for launch on 27 February and interested parties can follow it via live stream. The model is a fully electric sedan, which, according to industry observers, has the potential to compete with the Tesla Model 3.
Early in January, Polestar published its first teaser photo and key technical data on the planned electric vehicle. The model, which is based on Volvo’s new CMA platform, will have an output of around 294 kW and a range of around 483 kilometres. The price is not yet confirmed but is expected to be around €40,000.
The company wants to break completely new ground in sales as Polestar completely abandons the concept of traditional vehicle ownership. All cars are offered on a two or three-year subscription basis. The fixed monthly rate includes pick-up and drop-off services as well as the possibility of renting alternative Volvo and Polestar vehicles if required.