STOCKHOLM — Volvo Cars’ CEO said the Swedish automaker is talking to Chinese and U.S. investors as the company seeks external finance for its Polestar brand for electrified models.
Carmakers are seeking partnerships to cut the burden and cost of building new electric and autonomous vehicles. Those expensive technology challenges are coming as automakers such as Volvo try to offset the cost of an ongoing trade war between the U.S. and China and also meet tougher emissions requirements.
Volvo and Chinese parent Zhejiang Geely Holding 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 the brand’s initial development.
“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 on the sidelines of the automaker’s financial results press conference on Thursday.
“We’re looking in Asia, China but also at some known tech investors on the [U.S.] West Coast,” he said, adding that the fundraising could happen via a private placement and would depend on a good valuation and an attractive case.
Last month, Samuelsson told Germany’s Capital magazine that Polestar could tap financial investors as a precursor to a listing, but the company had also said then that there were no immediate plans to explore this.
“Right now we have the financing we need [for Polestar] … We need funding to drive the very expensive development so let’s see how fast that can happen,” he said.
On February 27, Polestar will unveil the Polestar 2, a sedan that the company has touted as competitor to the Tesla Model 3. It will also be the first of five full-electric vehicles that Volvo has promised to deliver to the market. Another confirmed model is a full-electric version of the Volvo XC40 compact SUV. The brand’s first model, the Polestar 1, is scheduled to go into production later this year. The 600-hp plug-in hybrid coupe, which will have a 150-km electric-only range, is expected to cost roughly 130,000 and 150,000 euros.
Volvo has so far funded the development of electric and driverless cars in-house, but like other carmakers is battling a sales slowdown in Europe and China and higher costs due to the tariff war between Washington and Beijing.
In September, Volvo and Geely dropped plans for a listing of the Swedish company, with an estimated valuation of between $20 billion and $30 billion, due to trade tensions and an auto industry downturn.
Samuelsson said on Thursday the company was not currently planning to go public.
Douglas A. Bolduc contributed