Volvo Cars has agreed to convert approximately $274 million of its outstanding shareholder loan into Polestar’s equity. After the completion of the previously announced approximate $300 million debt-to-equity conversion by Geely Sweden Holdings AB, Volvo Cars is expected to carry out a second debt-to-equity conversion later during the second quarter, totaling ~ $65 million. In doing so, Volvo Cars’ ownership in Polestar will remain at approximately 19.9%. The conversion price will be set at 95% of the 30-day volume-weighted average price in Polestar shares up to 27 March 2026. As the debt-to-equity conversion announced on 19 December 2025 by Geely Sweden Holdings AB, which will have a dilutive effect on Volvo Cars’ shareholding in Polestar, has not yet been completed, Volvo Cars intends to carry out a second, smaller conversion later in the second quarter, subject to agreed deadlines and necessary regulatory approvals.

Volvo’s US manufacturing facility is already a global production hub for the fully electric Volvo EX90 SUV. The EX90 is built on Volvo Cars’ SPA2 architecture, as is the Polestar 3. Apart from building Polestar 3 cars in the US, Volvo Cars previously announced that it will introduce its best-selling XC60 mid-size SUV to the South Carolina production line as well.

“Following the XC60, Volvo Cars also plans to add a new, next-generation hybrid model to the production line of the plant in Ridgeville outside Charleston, South Carolina before 2030. This new model is designed to meet the specific demands of the US market and reinforces Volvo’s long-term commitment to manufacturing in the country,” Volvo Cars said in a news release.

Michael Lohscheller, Polestar CEO, said, “We are grateful for the continued support from Volvo Cars in helping us to strengthen our balance sheet and reinforce our liquidity profile. Our strong operational collaboration with Volvo Cars continues through manufacturing, our commercial operations and offering our customers access to one of the most extensive service networks in the industry.”