Volvo Cars and Geely Holdings invest 5 billion RMB to develop Polestar
Volvo Cars and Geely Holdings invest 5 billion RMB to develop Polestar
Volvo Cars, the premium car maker, and its owner Geely Holding today announce they will jointly invest RMB 5 billion (EUR 640 million, Approximately USD $756 million) to support the initial phase of Polestar’s product, brand and industrial development.
The investment highlights the financial muscle and industrial and manufacturing expertise Polestar will have access to, and establishes the fully consolidated Volvo Cars subsidiary as a stand-alone electrified performance car company as it reveals its first production model in Shanghai today.
The investment will be used, among other things, to establish a state-of-the-art Polestar manufacturing facility in Chengdu, China, marking a new chapter in the development of China as a manufacturing hub for Volvo Cars.
This set-up will radically shorten the time Polestar needs to commercially launch its cars, giving it a strategic advantage compared to competitors. Volvo Cars and Polestar will also benefit from synergies in the development of next generation technologies such as shared procurement costs, joint development and economies of scale.
With China as a driving force behind the electrification of the global car industry, Polestar will spearhead the development of new technologies and enhance Volvo Cars’ leadership within electrification and connectivity.
Polestar’s first production car, the Polestar 1, is a 600hp two-door, four-seater hybrid coupé. It has a pure electric range of 150km - the longest full electric range of any hybrid car on the market. The electrified performance car will go in production in Chengdu in mid-2019, and will be closely followed later in 2019 by a smaller vehicle named Polestar 2.
The Polestar 1 exemplifies the inherent synergies between the Volvo and Polestar brands. Around half of the technology under the skin of the Polestar 1 is based on Volvo’s in-house developed SPA modular vehicle architecture, while the remaining half is entirely new and bespoke technology created by Polestar engineers working within Volvo’s R&D department.
Polestar will also benefit from having privileged access to Volvo’s global and well-established manufacturing standards and expertise as it establishes its own manufacturing operations in Chengdu.
The Polestar 2 will be the first fully-electric car launched by Volvo Car Group, and the first of a total of five fully electric Polestar- or Volvo-branded vehicles to be launched between 2019 and 2021. The Polestar models announced today are thus clear proof points of Volvo Cars’ electrification strategy that was revealed in July of this year.
Volvo Cars announced this summer that from 2019 every new Volvo-branded car launched will have an electric motor, making it the first established car company to fully embrace electrification and place it at the core of its future business.
For more information on the Polestar 1, see the separate press release.
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Volvo Car Group in 2016
For the 2016 financial year, Volvo Car Group recorded an operating profit of 11,014 MSEK (6,620 MSEK in 2015). Revenue over the period amounted to 180,672 MSEK (164,043 MSEK). For the full year 2016, global sales reached a record 534,332 cars, an increase of 6.2 per cent versus 2015. The record sales and operating profit cleared the way for Volvo Car Group to continue investing in its global transformation plan.
About Volvo Car Group
Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 534,332 cars in 2016 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.
As of December 2016, Volvo Cars had over 31,000 employees worldwide. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).
About Polestar
Polestar is Volvo Car Group’s performance road car brand. Polestar will become a new separately-branded electric high-performance car company, offering a portfolio of bespoke Polestar cars. Polestar will enjoy specific technological and engineering synergies with Volvo Cars and benefit from significant economies of scale as a result of its connection to Volvo. These synergies will allow it to design, develop and build world beating electrified high performance cars.
Today, Polestar builds the S60 and V60 Polestar, 367hp performance road cars with over 250 developments over-and-above the standard Volvo products. It also offers Polestar Engineered performance hardware upgrades and engine software optimisations for existing Volvo products.