Volvo & Polestar: Moving EV Manufacturing to the US

Volvo Cars and Polestar have announced a strategic restructuring of Polestar's capital alongside a significant consolidation of manufacturing operations in the United States.

The companies plan to consolidate production of Polestar 3 vehicles at Volvo's manufacturing facility in Ridgeville, outside Charleston in South Carolina, moving operations away from China.

Simultaneously, Volvo will now hold a 19.9% stake in Polestar following the conversion of approximately US$274m of outstanding shareholder loan into equity.

The announcement comes as US automotive manufacturers face 100% tariffs on Chinese-made EVs alongside ongoing regulatory uncertainty in the electric vehicle sector.

Consolidating operations in South Carolina

Volvo's South Carolina facility has received US$1.3bn in investment over the past decade, positioning it as a key manufacturing hub in the company's global footprint. The plant currently produces Volvo's EX90 SUV EV, which shares the SPA2 architecture platform with the Polestar 3.

Håkan Samuelsson, Chief Executive of Volvo Cars, explains: "The move to consolidate global Polestar 3 production in Charleston help generate efficiencies for both companies, whilst also underscoring our confidence in the plant and the role it plays in our manufacturing footprint."

Håkan adds that the US represents a crucial market for Volvo Cars' growth ambitions and serves as a strategic production site for regional and export demands.

The Polestar 3 is currently manufactured in Chengdu, China, but the consolidation will see all production shifted exclusively to the US facility.

Restructuring Polestar's balance sheet

Polestar released a statement outline that Volvo would carry out a debt-to-equity conversion of roughly US$274m and extension of shareholder loan from Volvo, with a further conversion of approximately US$65m expected later in the second quarter.

The maturity date for Volvo's remaining shareholder loan to Polestar, valued at approximately US$661m, has been extended to December 2031.

Michael Lohscheller, Polestar CEO, says: "We are grateful for the continued support from Volvo Cars in helping us to strengthen our balance sheet and reinforce our liquidity profile."

Navigating challenging market conditions

The restructuring follows Polestar's December 2025 announcement of a US$300m debt-to-equity conversion agreement with Geely Sweden Holdings, which maintains a controlling stake in Volvo Cars.

In March 2026, Polestar secured a US$300m investment from purchasers including Crédit Agricole CIB, Vida Finance S.A., Innovator Limited and Proximastar Holdings Company Limited as part of efforts to strengthen its financial position.

Manufacturing operations face significant headwinds as 100% tariffs on Chinese-made EVs impact the US market, with multiple companies adjusting or abandoning EV production plans.

"As market conditions remain challenging, we continue to take steps to make our organisation and operations more efficient," Michael said when announcing Polestar's operational results for the third quarter of 2025.