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Volvo to stop funding Polestar, sees stock rise dramatically

STOCKHOLM — Volvo Cars said on Thursday it would stop funding Polestar Automotive Holding and was handing responsibility for the struggling luxury car brand over to Volvo's top shareholder China's Geely Holding. The announcement sent the Swedish automaker's stock up more than 30% at market open. The heavy involvement by Swedish-listed Volvo Cars in Polestar, where it owns around 48% of the shares, has been criticised by analysts who see the stake as a drag on Volvo's resources. Like other new EV brands and startups, Polestar has struggled to make headway, particularly since Tesla started a price war last year. The automaker said earlier this month that it had missed its already-reduced delivery targets for 2023. Polestar's shares are down just over 83% since it went public in June 2022 via a merger with a special purpose acquisition company, or SPAC. Volvo Cars said it has considered handing Polestar shares over to Volvo's shareholders, which would make Geely a big direct owner in the brand. Shares in Volvo were up 20% at 0814 GMT, after they soared 32% at market open. Geely in a separate statement welcomed Volvo's decision to focus its resources on its own development. "Geely Holding will continue to provide full operational and financial support to the independent exclusive (Polestar) brand going forward," the Chinese group said. "This support will not require a reduction of Geely Holding shareholding in Volvo Cars," it added. However, the broker Bernstein said it saw a distinct possibility that the Geely ecosystem could sell down its shares in Volvo. Polestar last week said it planned to cut around 450 jobs globally, or about 15% of its workforce, amid "challenging market conditions". It also said in November that it would try to reduce its reliance on external help, publishing a revised business plan, which included getting additional loans from Volvo and Geely. The news could raise questions about the viability of Polestar, which aims to become cash flow break-even in 2025. Some analysts have said it could make more sense to fold Polestar company into Geely. Volvo Cars meanwhile reported a bigger than expected rise in fourth-quarter operating earnings on Thursday, with operating income excluding joint ventures and associates rising to 6.7 billion Swedish crowns ($643.83 million) from a year-earlier 3.9 billion. Analysts polled by LSEG had expected adjusted earnings before tax and interest (EBIT) of 6.5 billion.

Volvo, Polestar reportedly planning twin city-friendly electric SUVs

Volvo is nearly ready to unveil the next generation of the XC90, its flagship model, but it's not forgetting about the other end of its range. It's reportedly planning to launch an entry-level model that will take the form of a pocket-sized crossover powered by an electric drivetrain. Without citing sources, British magazine Autocar reported that the model will ride on a modular platform developed by Volvo parent company Geely and called SEA internally. This architecture already underpins the 001 sold by Zeekr, which is another brand in the Geely empire. No technical specifications are available at this point, but the report sketches the outline of a high-riding model with a sleek-looking silhouette. This isn't the first time we've heard about Volvo's city-friendly SUV; earlier rumors claimed it would be called XC20 or C20, names that would have clearly signaled the model's positioning as being below the 40-badged cars. Volvo is moving away from this naming system, however, and the cars it will launch in the coming years will receive actual names. With that said, both the XC20 and the C20 names are off the table. Polestar's take on the concept of an electric entry-level crossover will be positioned between the 2 and the 3, though it will somewhat confusingly be called 4. It sounds like the model will be bigger and more expensive than Volvo's, and Autocar learned that it could be closely related to the C40 Recharge (pictured) underneath the sheetmetal. If that's accurate, it will share its CMA architecture with the 2, among other models, and it will be offered with either a single electric motor that zaps the front wheels or dual-motor all-wheel-drive. Both EVs will have at least one thing in common: a mission to boost sales. For Volvo, launching a battery-powered car pegged near the bottom of its range will increase the percentage of EVs in its global sales mix. It's planning to cross the 50% mark by 2025. For Polestar, entering cheaper segments will allow it to boost its annual sales by reaching less affluent buyers, though it will remain a premium brand. Polestar 4 is tentatively due out in 2023. There's no word on when Volvo will release its smallest EV to date.

Ford, Volvo join Redwood in EV battery recycling push in California

Ford and Volvo will join battery recycling startup Redwood Materials in developing processes, starting in California, to collect end-of-life batteries from electric and hybrid vehicles and recover the materials for use in new batteries, the companies said Thursday. Redwood Materials, co-founded by former Tesla executive JB Straubel, formed an earlier partnership last fall with Ford to develop a “closed loop” or circular supply chain for electric vehicle (EV) batteries, from raw materials to recycling. On Thursday, Redwood Materials said it would work directly with dealers and dismantlers in California to identify and recover end-of-life battery packs. The materials in those packs will be recovered and recycled at Redwood Materials facilities in northern Nevada. U.S. automakers Ford and General Motors Co (GM) have said the battery recycling effort is crucial in efforts to develop a domestic supply chain to meet increasing EV demand. GM and battery partner LG Energy Solution last year announced a partnership with startup Li-Cycle to recycle battery scrap material from Ultium Cells, the GM-LG joint venture that is building battery plants in Ohio, Tennessee and Michigan. Redwood Materials has similar partnerships with battery makers Panasonic in Nevada and Envision AESC in Tennessee, as well as with Amazon. Ford and Amazon are among the investors in Redwood Materials. Reporting by Paul Lienert in Detroit; Editing by Mark Potter Green Ford Volvo Green Automakers Electric