Volvo Cars (VOLCARb.ST) announced on Thursday that it would no longer fund Polestar Automotive Holding (A4N1y.F), handing over responsibility for the luxury car brand to China’s Geely Holding, which is also Volvo’s majority owner.
Analysts have criticized Swedish-listed Volvo Cars’ heavy involvement in Polestar, where it owns approximately 48% of the shares, citing the stake as a drain on Volvo’s resources.
Volvo Cars stated that it considered transferring Polestar shares to Volvo’s shareholders, making Geely a significant direct owner of the brand.
Geely, in a separate statement, praised Volvo’s decision to focus its resources on internal development.
“Geely Holding will continue to provide full operational and financial support to the independent exclusive (Polestar) brand going forward,” the company said in a statement.
“This support will not require a reduction of Geely Holding shareholding in Volvo Cars,” according to the statement.
Polestar announced last week that it intends to cut approximately 450 jobs worldwide, or approximately 15% of its workforce, due to “challenging market conditions”.
Volvo Cars, meanwhile, reported a larger-than-expected increase in fourth-quarter operating earnings, with operating income excluding joint ventures and associates of 6.7 billion Swedish crowns ($643.83 million), up from 3.9 billion a year earlier.
Analysts polled by LSEG expected adjusted earnings before taxes and interest (EBIT) of 6.5 billion.