On 1 February, Volvo announced the transfer of "full operational and financial support" from its Polestar subsidiary to Geely. As soon as the news came out, many netizens speculated that Volvo was going to quit the management of Polestar and hand over the stall to Geely.
In fact, Volvo is not completely out of Polestar, as they say they will continue to work with Polestar on R&D, manufacturing, after-sales support and commercial. In other words, Volvo is now only responsible for the development and operation of Polestar, which is a matter of Geely.
Not only that, Volvo said on the same day that it is currently evaluating the adjustment of its stake in Polestar cars and may allocate its shares to its parent company, Geely Holding Group. Clearly, Volvo has a "deaf ear" approach to Polestar, and is neither willing to provide capital nor be a shareholder to take responsibility.
As soon as the news came out, many riders were shocked, and Volvo's move was equivalent to discarding the "biological" Polestar. In fact, this is not that Volvo is ruthless, but that Polestar is indeed too "loser".
The Polestar 1, priced at 1.45 million, attracted a lot of attention when it was first released, but the hungry marketing of 500 units a year left the sales department with no cars to sell. You know, even the more expensive Bentley would not dare to play like this.
The Polestar 2 in the back brought the brand into a desperate situation, claiming that the "Tesla Killer" has a price of 300,000 yuan and only 7 seconds 4 seconds.
Seeing that the two products have collapsed into the sand, Polestar is also in a hurry, but the third model, Polestar 3, directly benchmarks against ultra-luxury brands such as Porsche, and wants to re-establish the brand image, completely subverting the previous brand positioning.
In addition, Polestar is still playing differentiation, with the Polestar 3 priced at 880,000-1.03 million yuan in the Chinese market and only 8.03 million yuan in the North American market$390,000 (about $60.)350,000 yuan), a difference of more than 200,000 yuan. If Polestar is a purely overseas brand like Mercedes-Benz, people don't have so many complaints, but Polestar's other major shareholder is Geely, a Chinese brand, and it is really puzzling that Chinese consumers should be treated differently at this time.
All kinds of "troubles" made the Polestar brand completely lose its appeal, and at the same time, it also made Volvo full of sadness, because after a large amount of money was injected, not only did it not get a return, but even the brand was not launched. In addition, Volvo and Geely added 4After $500 million, Polestar is still far from breakeven, and officials speculate that it will need $1.3 billion.
In other words, Volvo will have to invest at least $600 million or $700 million before it has a chance to be rewarded on Polestar. Volvo is clearly reluctant to do so. Therefore, Volvo had no choice but to take the step of "stopping the loss in time" and simply let Polestar out.
After the news was issued, Volvo's stock price soared by more than 30%. Obviously, the capital market also thinks that Polestar is dragging down Volvo. After all, since the merger of Polestar and SPAC, the company's share price has risen by more than 83%. And Volvo's stake in Polestar at this time is also a wise decision.
Volvo wanted **, and Geely had no way not to take over, so after Volvo's statement was released, Geely immediately expressed its support for Volvo's decision and was willing to accept Polestar. If nothing else, Polestar will most likely become another car brand under Geely.
Being able to get another car brand, although it will help Geely Holdings' car empire, but it has also increased the weight on Geely a lot, Geely Auto Group already has a high-performance brand Lotus, which is also transforming to electrification, at this time there is another Polestar, how to draw the boundary between the two?
What's more, Polestar is not in a good position right now, with losses still occurring despite revenue growth, and it is unclear whether the new Polestar 4 will be able to break through in a highly competitive market. Therefore, Geely's acceptance of Polestar is not a big bargain, on the contrary, it may be a burden.