Say what you will about the US import tariffs on automobiles and their unpleasant effects on automakers and buyers alike, but the truth is they have been very successful so far in convincing (i.e. forcing) companies to invest in US manufacturing.
The latest one to do so is Polestar, the EV maker majority-owned by China’s Geely, which has announced that it will consolidate US production of Polestar 3 electric SUVs at the Ridgeville, South Carolina plant operated by Volvo Cars (which is also owned by Geely).
Polestar 3 EV Will Be Made Exclusively in the US for Global Markets
Polestar
This effectively means that the Polestar 3, which is also produced in Chengdu, China, will be made exclusively in the United States for global markets. Polestar 3 production at the Chinese plant, which started in early 2024, will soon come to an end.
A Volvo Cars spokesperson told WardsAuto that the “the consolidation of global production of Polestar at Volvo Car Charleston is planned to take place from the fourth quarter of 2026, onwards.” In a press release, the Swedish automaker says the move further reinforces the strategic role of its US plant as a key manufacturing hub for Volvo Cars and Polestar.
“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,’ said Volvo Cars CEO Håkan Samuelsson. ‘The US is a very important market for Volvo Cars, both to support our growth ambitions as well as a strategic production site to meet regional and export demands.”
Volvo
The South Carolina plant already builds Polestar 3 EVs for the US market, as well as the EX90 electric SUV; both vehicles are built on Volvo Cars’ SPA2 platform. In addition to these EVs, Volvo will make the XC60 compact SUV at its South Carolina factory. The carmaker also plans to add a new, next-generation hybrid model to the production line of plant before 2030. The as-yet-unnamed model is designed to meet the specific demands of US buyers.
Located outside Charleston, the Ridgeville plant currently has an installed production capacity of 150,000 cars per year, following investments totaling $1.3 billion in the last decade.
Volvo Cars to Increase Its Polestar Stake to 19.9%
James Ochoa
Manufacturing announcement aside, Polestar and Volvo Cars had another update to share regarding a $274 million outstanding convertible loan from Volvo Cars that has been converted into Polestar equity. The transaction saw Volvo Cars increase its stake in Polestar from 9.8% to 19.9%.
Mind you, the deal is expected to be followed by a previously announced $300 million debt-to-equity conversion by Geely Sweden Holdings AB, in which case Volvo Cars’ stake will be temporarily diluted. The Swedish carmaker will then carry out a second, smaller conversion of approximately $65 million to maintain its stake in Polestar to 19.9 percent.
Volvo Cars said the initial conversion has taken effect on March 31, 2026, with the second smaller conversion set to follow during the second quarter 2026, provided that Geely Sweden Holdings AB’s conversion is completed.
Volvo Cars’ total outstanding loan amounted to $1 billion, with maturity in 2028. After the two conversions will be complete, the remaining outstanding loan is estimated to amount to $661 million, with its maturity extended to December 2031.
