Polestar, mired in layoffs and sluggish sales, may need Geely to point it in the right direction. On Feb. 1, Volvo Cars said it was evaluating the restructuring of Volvo Cars' stake in Polestar. "The focus will be on Volvo Cars as the next phase of Volvo Cars' transformation includes significant investments in technological innovation and future-proof production facilities. Volvo Cars said that as a result, it will not provide further financial support to Polestar and may distribute shares to other shareholders, and Geely Sweden Holding will become a significant new shareholder of Polestar Cars.
On the same day, Geely Holding Group said it supports Volvo Cars in making potential adjustments to its Polestar stakes, so as to concentrate resources on Volvo Cars' own transformation and development. If the shareholding adjustment is completed, Geely Sweden Holding, a subsidiary of Geely Holding Group, will become a significant shareholder of Polestar.
According to the data, in 2015, Polestar was acquired by Volvo and became a high-performance brand of Volvo. In 2017, Polestar announced its independence as a joint venture between Volvo Cars and Geely Holdings, headquartered in Sweden and with production facilities in China, and its models sold globally. Currently, Volvo Cars holds a 48% stake in Polestar. In June 2022, Polestar was listed on the NASDAQ. Despite its successful landing in the capital market, the development of Polestar in recent years has not been optimistic.
At present, the global new energy vehicle market continues to heat up, but Polestar has not been able to catch the electric "fast train". According to the data, from 2020 to 2022, the global sales of Polestar cars were 1020,000 units, 290,000 and 5150,000 units. Last year, Polestar lowered its sales target from 80,000 to 60,000 units, but the final sales volume was only 5460,000 units, not meeting expectations.
Previously, Polestar had been competing with Tesla, but last year Tesla sold 1.81 million vehicles worldwide. In the Chinese market, Polestar's sales are even more sluggish. According to third-party platform data, Polestar sold only about 1,100 vehicles in China last year, down 34% year-on-year. Feng Dan, CEO of Polestar China, once said frankly: "Although Polestar cars have been in China for five years, we have neither quality nor brand in the Chinese market, which is some of the detours we have taken, and some of the tuition fees we have paid. Yan Jinghui, a member of the expert committee of the China Automobile Dealers Association, said: "There is a gap between Polestar's high positioning and high pricing strategy and its brand perception in the minds of consumers. "Take Polestar's first high-volume model, the Polestar 2, for example, which is positioned as a compact model, but the starting price is close to 300,000 yuan, while the starting price of the Polestar 3 model is as high as 6980,000 yuan. In addition, the world premiere of the Polestar 4 at the Shanghai Auto Show last year, with a price of 34980,000-53380,000 yuan, but its price dropped to 29 when the pre-sale was opened990,000-36990,000 yuan.
The pressure on Polestar is not only due to sluggish sales, but also to its financial statements. According to the financial report, Polestar's operating loss in the first three quarters of last year reached 73.5 billion US dollars, gross profit is only about 21.2 million US dollars, a year-on-year decline of more than 60%. In order to control costs, in the second quarter of last year, Polestar announced a global hiring freeze and a 10% layoff.
The specific details of the equity adjustment have not yet been announced, but from the statements of Volvo and Geely, the outside world speculates that "Geely's voice will be further increased". Previously, some analysts believed that Volvo was fully focused on its own business development and electrification transformation, and Polestar cars could drag Volvo down. Judging from the announcement, Volvo Cars said that it will no longer provide further financial support to Polestar cars. On the other hand, Geely said that Geely will continue to fully support the future development of the Polestar brand in terms of operation and finance, and expand synergies in basic technology, advanced chain, manufacturing and other aspects. Some industry insiders believe that Geely, as a global car company, not only understands the Chinese market but also lays out overseas markets, and if it increases its investment and control over Polestar cars, it may be able to change the status quo of Polestar cars being "lost".
Beijing Business Daily reporter Liu Yang Liu Xiaomeng.