Volvo Cars and Polestar are strengthening their long-standing partnership through a combination of manufacturing consolidation and financial restructuring, aimed at improving efficiency and supporting future growth.
Polestar 3 Production Moves to the US
The companies plan to consolidate global production of the Polestar 3 at Volvo’s manufacturing facility in Ridgeville, near Charleston, South Carolina.
The model is currently also produced in Chengdu, China, but the shift underscores the increasing importance of Volvo’s US plant within its global production network.
The Charleston facility already serves as a key hub for the fully electric Volvo EX90, with both models sharing Volvo’s advanced SPA2 platform. By centralizing production in the US, Volvo and Polestar aim to streamline operations, reduce complexity, and improve overall manufacturing efficiency.
Volvo Cars CEO Håkan Samuelsson highlighted the strategic value of the move, emphasizing the US market’s importance for both regional demand and export opportunities.
Expanding US Manufacturing Footprint
Volvo’s South Carolina plant is set for further expansion. In addition to the Polestar 3, the company plans to bring production of the popular Volvo XC60 to the facility. Looking ahead, a next-generation hybrid model tailored specifically for US customers is also scheduled to join the production line before 2030.
Over the past decade, Volvo has invested approximately $1.3 billion into the Charleston plant, which now has an annual production capacity of up to 150,000 vehicles. The site plays a crucial role in Volvo’s strategy of maintaining a balanced manufacturing footprint across the US, Europe, and China.
Financial Restructuring Strengthens Polestar
Alongside the manufacturing shift, Volvo Cars is reinforcing Polestar’s financial position. The company will convert approximately $274 million of its outstanding shareholder loan into equity, helping to strengthen Polestar’s balance sheet.
This follows a previously announced $300 million debt-to-equity conversion by Geely Sweden Holdings AB. Volvo Cars is also expected to complete an additional conversion of around $65 million in the second quarter of 2026, maintaining its ownership stake in Polestar at roughly 19.9%.
The remaining $661 million shareholder loan has been extended to December 2031, providing Polestar with greater financial flexibility and a longer debt maturity profile.
Polestar CEO Michael Lohscheller noted that the continued backing from Volvo Cars enhances liquidity while supporting operational collaboration across manufacturing, commercial activities, and aftersales services.
Strategic Alignment for Future Growth
The combined initiatives—production consolidation and financial restructuring—highlight a deeper alignment between Volvo Cars and Polestar. By leveraging shared platforms, manufacturing capabilities, and financial resources, both companies are positioning themselves to compete more effectively in the rapidly evolving global EV market.
