(Yicai) Feb. 1 -- Geely Holding Group declared its ongoing support to Polestar after Sweden's Volvo Cars, another shareholder of the electric vehicle brand, said it is considering transferring its stake to the Chinese auto giant to focus on a line-up of in-house electric models.

Geely welcomes Volvo’s decision to focus its resources on corporate transformation and a potential adjustment to its shareholding in Polestar, the Zhejiang province-based owner of brands Lynk & Co and Zeekr said today.

The Chinese firm will continue to provide full operational and financial support to Polestar going forward, and this support will not require a reduction of Geely’s shareholding in Volvo, it added.

Volvo and Geely formed the joint venture brand in 2017. Polestar went public via a special purpose acquisition company in June 2022. The maker of premium electric vehicles sold more than 41,800 units in the first nine months of last year, up by 37 percent from 2022, according to the latest data.

Gothenburg-based Volvo announced in its annual report yesterday that the firm is evaluating a potential adjustment to its shareholding in Polestar, including a distribution of shares to Volvo’s shareholders. This could make Geely Sweden Holdings, a subsidiary of Geely, a significant new shareholder of Polestar. Volvo will no longer provide further funding to Polestar, it added.

Shares of Volvo [STO: VOLCAR-B] surged after the announcement of better cost control as the stock price hovered 21.7 percent higher at SEK33.24 (USD3.20) as of 11.20 p.m. local time.

Polestar is reportedly laying off staff. Reuters reported on Jan. 26 that the new energy vehicle firm plans to cut around 450 jobs globally, or about 15 percent of its workforce, amid challenging market conditions. Polestar also trimmed delivery forecasts and outlined a revised business plan as the firm aims to break even in 2025 while reducing its reliance on external funding, per the report.

Polestar's owners are linked as Geely bought all of Volvo's equity for USD1.8 billion in 2010. Volvo went public on Nasdaq Stockholm, formerly known as the Stockholm Stock Exchange, in 2021. Geely's holding in Volvo has dropped to a bit less than 79 percent after finishing a sale of about USD350 million of shares last November.

Editor: Emmi Laine