Sweden’s Volvo Car Group increased its stake in electric car manufacturer Polestar, increasing its stake in Polestar to 49.5%. Polestar is controlled by Volvo’s parent company, Geely.
The investment was made after Polestar raised US$550 million in its first round of external financing in April.
“This move reflects Volvo Cars’ firm belief in Polestar’s positioning and exciting potential in the high-growth field of high-end electric vehicles.” Volvo said in a statement.
Tesla shares have fallen 9% this year due to concerns about increased competition from traditional automakers in the production of electric vehicles.
Polestar produces hybrid vehicles in Chengdu, China, and sedans at its Taizhou plant. The company is also developing a new model called Precept, which is a larger, more environmentally friendly sedan that was exhibited at the China Auto Show last year.
Volvo said it has no plans to increase its holdings of Polestar shares, except for the 49.5% it currently holds.