From Morningstar:

Shares of Volvo Car, majority owned by China’s Geely, rose 32% at the open and traded 27% higher on Thursday. Swedish automaker Volvo reported a 10% increase in Q4 net sales to 148.1 billion kronor. Adjusted operating income grew to 18.38 million kronor from 12.17 million in 2022.

Volvo Cars is evaluating an adjustment of shareholding in Polestar, including shares distribution to Volvo Cars shareholders. Geely will continue to support Polestar. Volvo Cars will no longer finance its electric car subsidiary, extending repayment period of existing convertible loan by 18 months.

Volvo Cars acquired 44% stake in Polestar in 2015. The luxury electric vehicle brand went public in June 2022 and has struggled. Analysts have raised concerns about Polestar becoming a drag on Volvo’s resources before the planned spin-off.

Volvo’s decision to spin-off Polestar triggered jump in company’s share price. It plans to sell all or part of Polestar and invest in Volvo, which is showing promise. Despite a recent sharp decline, 2023 was Volvo’s best year ever with sales of 709,000 cars, up 21% from 2022, and a turnover of SEK 399 billion.

The weak performance of Volvo’s share price is not indicative of poor company development. Volvo’s 2023 earnings were its best ever, with the company expecting higher growth in 2024. Analysts believe it’s a great time to invest in Volvo.



Read more: Volvo Car Soars After Announcing Polestar Exit,…