Volvo and Polestar have announced the consolidation of production for the Polestar 3 at the former’s plant in Ridgeville, South Carolina. It initially built the lifted wagon-like SUV in Chengdu, China, before U.S. production began. The decision comes as a way to reinforce Volvo’s balanced and global manufacturing footprint, optimizing its plants for maximum efficiency.
In addition to the Polestar 3, the Ridgeville, South Carolina, facility builds the EX90, which shares the SPA2 architecture with it. The next-generation Volvo XC60 and a new hybrid model will be built there in the near future. Currently, Volvo has invested $1.3 billion into this plant in the last decade to futureproof it. The plant currently has a capacity of 150,000 cars per year.
In addition, Volvo agreed to convert approximately $274 million of its shareholder loan into Polestar equity. This follows the completion of a previously announced debt-to-equity conversion of around $300 million by Geely Sweden Holdings AB. Later in the second quarter, Volvo Cars will announce a second debt-to-equity conversion of around $65 million. This move keeps Volvo Cars’ ownership stake in Polestar at approximately 19.9 percent. Additionally, it extended the maturity of the remaining balance of roughly $661 million shareholder loan to December 2031. As a result, this strengthens Polestar’s balance sheet while extending its debt maturity profile.
This shows how closely tied Volvo and Polestar are. Additionally, it seems to hint that upcoming Volvo and Polestar models may be more closely related than ever and less reliant on Chinese production lines. The EX90 and Polestar 3 are just the start of that. With the EX60 and the new SPA3 platform, more sharing may happen to improve efficiency and bring more products to the market faster. The Polestar 4 also shares the SEA platform with parent Geely.
