Volvo to Raise Polestar Stake to 19.9% via Debt-to-Equity Conversion

On March 31, Polestar announced that Volvo Cars has agreed to convert approximately $274 million in outstanding shareholder loans into equity in Polestar.

Following a previously disclosed debt-to-equity conversion of around $300 million by Geely Sweden Holdings, Volvo Cars is expected to carry out a second conversion of approximately $65 million later in the second quarter, bringing its stake in Polestar to around 19.9%.

With part of its debt converted into equity and the maturity of the remaining approximately $661 million in shareholder loans extended to December 2031, Polestar’s short-term debt servicing pressure is significantly eased, while its balance sheet is correspondingly strengthened.

On the operational side, Polestar and Volvo Cars are also planning to integrate future production of the Polestar 3 into Volvo’s plant in Charleston, South Carolina, to reduce costs and improve efficiency.

Public information shows that Polestar, which originated from Volvo’s high-performance division, became an independent high-performance luxury brand in 2017, jointly developed by Volvo Cars and Geely Holding.

However, since February 2024, Volvo has been reducing its stake, announcing plans to distribute 62.7% of its approximately 48% holding in Polestar to Geely. Upon completion, Volvo’s stake fell to about 18%.

The recent capital moves are broadly in line with Polestar’s operating trajectory over the past year.

Since December 2025, with support from Geely Holding, the company has completed a new round of equity financing totaling $1 billion.

At the same time, by adjusting the ratio of its American Depositary Shares (ADS) to ordinary shares late last year, Polestar regained compliance with Nasdaq listing requirements, avoiding delisting risk.

Polestar CEO Michael Lohscheller said that, building on record retail sales last year, the company is improving its liquidity structure through continued long-term capital inflows while preserving flexibility for future development.

Official data show Polestar’s retail sales reached an estimated 15,608 units in the fourth quarter of 2025, up 27% year-on-year. Full-year retail sales totaled approximately 60,119 units, up 34%.

In terms of product lineup, Polestar currently offers the Polestar 2, 3, 4, and 5.

Lohscheller said the company plans to launch four new models over the next three years to further expand its portfolio.