Swedish automaker Volvo Cars announced Tuesday its decision to transform approximately $274 million in outstanding debt from electric vehicle manufacturer Polestar into equity shares, supporting plans to manufacture Polestar 3 vehicles at its South Carolina manufacturing facility.
The automotive company plans to execute an additional debt-to-equity conversion worth roughly $65 million during the second quarter of 2026, following a similar $300 million transaction by parent company Geely Holding.
After completing these conversions, Volvo Cars will maintain approximately 19.9% ownership in Polestar. The Swedish manufacturer previously held majority control of the electric vehicle brand before transferring most of its stake to Geely in 2024.
This financial restructuring highlights the growing collaboration between Volvo Cars and Polestar, with both companies controlled by Chinese conglomerate Geely Holding. The parent company seeks to reduce operational expenses, expand production capabilities, and optimize manufacturing resources across its automotive portfolio.
In a related development announced Monday, Volvo Cars will serve as the sole European distributor for Lynk & Co vehicles, another automotive brand within the Geely family of companies.
