Summary
- Geely Holding chair Li Shufu says isolation is ‘self destructive’
- Volvo chair says survival depends on deeper ties with Geely brands
- Samuelsson accelerates integration
- Volvo Cars to convert $274 million of Polestar debt into shares
- After deal, Volvo Cars to own 19.9% of Polestar Geely Holding
GOTHENBURG, (Reuters) – Volvo Cars’ only way to survive as competition intensifies is by cooperating with Geely’s other car brands, the Swedish group’s and Geely Holding’s chair Li Shufu said on Tuesday.
Stronger cross-brand cooperation and deeper integration of suppliers have been cornerstones of CEO Hakan Samuelsson’s strategy after he was brought back by Li a year ago.
Samuelsson has quickly pushed through a series of sharp changes and struck multiple deals with Geely brands, including plans to build the Polestar 7 at Volvo’s upcoming plant in Kosice, Slovakia.
Volvo has also become the European distributor for Lynk & Co and has reshaped its own model lineup, placing greater emphasis on plug-in hybrids.
Li Shufu – who also goes by Eric Li – said closer coordination across Geely’s automotive empire was essential as the global car industry undergoes rapid change.
“Working in isolation will ultimately lead to a self-destructive path to obsolescence,” Li said at the company’s annual general meeting in Gothenburg, adding that it should strengthen its research and development capabilities in China.
Li’s listed flagship Geely Auto said last week that its European technology hub plans to double the number of vehicle projects it manages by next year, as the group steps up efforts to compete in the region and speed up the rollout of new models across brands including Geely Auto, Zeekr and Lynk & Co.
Geely Holding aims to rank among the world’s five leading automakers with global sales of more than 6.5 million vehicles by 2030, with one-third of those sales being outside of China, relying on its brands such as Volvo Cars and Polestar.
Volvo Cars’ CEO Hakan Samuelsson said partnerships across Geely brands offered a unique opportunity to defend Volvo’s market position as Chinese rivals expand.
“It is how can we, in a really positive way, utilise synergies without jeopardising Volvo as a brand and a standalone company,” he told Reuters in an interview on Tuesday.
VOLVO TIGHTENS TIES WITH SISTER BRANDS
Polestar, formerly majority-owned by Volvo Cars before it divested most of its stake to its co-founder Geely Holding in 2024, has already relied heavily on resources and funding from its owner to help make its vehicles as sales and profits remain below expectations.
Earlier on Tuesday, Volvo Cars and Polestar said that production of the Polestar 3 – a sister car to Volvo’s EX90 – will from now on be produced only in Volvo’s South Carolina factory, and that production in China of the car would cease.
The Polestar 3 shares design, technology and pricing with Volvo’s EX90 whose lower sales contributed to a more than $1 billion impairment last July.
The Swedish carmakers also said Volvo would convert into shares more than $300 million of Polestar’s old debt.
Volvo will convert about $274 million initially, followed by roughly $65 million in Q2 2026, taking its stake to about 19.9%. It has also extended the maturity of its remaining $661 million credit line with Polestar to 2031.
Reporting by Marie Mannes in Gothenburg and Alessandro Parodi in Gdansk, editing by Milla Nissi-Prussak and Louise Heavens
