Volvo has announced it is to stop funding EV brand Polestar.

Both manufacturers are owned by Geely, and Volvo says it is Geely which will provide full operational and financial support to Polestar going forward.

Volvo, which has made the announcement with its 2023 financial results, said it was evaluating a potential adjustment to Volvo Cars’ shareholding in Polestar, including a distribution of shares to Volvo Cars shareholders, which may result in Geely Sweden Holdings becoming a significant new shareholder.  

Volvo said it would extend the repayment period for an existing convertible loan to Polestar by 18 months to the end of 2028, subject to relevant approvals. It said its “strong operational collaboration across R&D, manufacturing, aftersales and commercial” with Polestar would continue.

Volvo says it wants to concentrate on its own development, including new models such as the EX30, EX90, and EM90.

Polestar was previously a Volvo sub-brand, but became a brand in its own right in 2017.

Polestar CEO Thomas Ingenlath said: “With our growing line-up of exclusive, performance cars, Polestar is in one of the most promising phases of its development. 

“We have successfully ramped up production and started sales in China, Europe and Australia of Polestar 4 and Polestar 3 is expected to start first customer deliveries this summer. 

“We look forward to continued cooperation with Volvo Cars as well as benefiting from even greater synergies with Geely on future orientated technologies.”