Volvo Cars courts China, U.S. tech investors to fund Polestar rollout
Automotive News | 2019-2-8
STOCKHOLM -- Volvo Cars is talking to Chinese investors as well as U.S. tech investors as the company seeks external financing for its Polestar performance electric car brand, the Swedish carmaker's CEO said on Thursday.|
Automakers are striking partnerships to cut the burden and cost of building new electric and autonomous vehicles, while also grappling with the challenges of Washington's trade war with China and product development delays due to new emissions rules.
Volvo and Chinese parent Geely have each held a 50 percent stake in Polestar since 2017, when they agreed to jointly invest 5 billion Chinese yuan ($736 million) to fund initial development at the luxury electric vehicle brand.
"There's a big interest now to invest in the future of mobility and electrification and autonomous drive. So I think we have a very strong story with Polestar which is attractive to many," Volvo CEO Hakan Samuelsson told journalists.
"We're looking of course in Asia, China, but also some known tech investors on the West Coast," he said, adding that fundraising could happen via a private placement and would depend on a good valuation.
Last month, Samuelsson told Germany's Capital magazine that Polestar could tap financial investors as a precursor to an initial public offering, but the company had also said then that there were no immediate plans to explore private financing or an IPO.
"Right now we have the financing we need for the time being (for Polestar)... We need funding to drive the very expensive development so let's see how fast that can happen," Samuelsson said.
On February 27, Polestar will unveil the Polestar 2, a sedan that Polestar has widely touted as a competitor to Tesla's Model 3 and also the first of five full-battery electric vehicles that Volvo has promised to launch.
Volvo has so far funded the development of electric and driverless vehicles in house, but like other carmakers is battling a slowdown in sales across Europe and China, and higher costs due to the tariff war between Washington and Beijing.
In September, Volvo and Geely dropped plans for an initial public offering in the Swedish company, with an estimated valuation of between $20 billion and $30 billion, due to trade tensions and the auto industry downturn.
Samuelsson said on Thursday the company was right now not planning to go public.
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