Swedish carmaker Volvo Cars announced Thursday it will not provide further funding to Polestar, as the company prioritises resources on its own “ambitious” journey, Kallanish reports.

The company is considering an adjustment to its shareholding in Polestar, which may result in Geely Sweden Holdings becoming a significant new shareholder in Polestar Automotive Holding UK plc. Volvo Cars, which is 79% owned by Geely, holds a roughly 44% stake in Polestar.

The plan comes as Volvo enters a “decisive phase” in its transformation journey to all-electric by 2030, it explains. The move means a significant ramp up in investments covering electrification, software, core computing architectures, advanced connectivity, data capture and analytics, mega casting, next-generation e-motor and battery technology, smart cabin technology and a new advanced manufacturing facility, Kallanish learns.

“As we move into the next phase of our transformation …. our focus is on developing Volvo Cars and concentrating our resources on our own ambitious journey,” Volvo says. “We will, however, extend the repayment period for the existing [Polestar] convertible loan by 18 months to the end of 2028. This will be subject to relevant approvals and further information will be provided in due course.”

Under the plan, Volvo and Polestar would continue its “strong operational collaboration” across R&D, manufacturing, after sales and commercial. Meanwhile, Geely would continue to provide full operational and financial support to Polestar as a direct shareholder.

In a separate statement, Polestar welcomed the potential outcome and Geely’s “long-term commitment to its development and growth as an independent exclusive performance brand.”

“We look forward to continued cooperation with Volvo Cars as well as benefitting from even greater synergies with Geely on future orientated technologies,” adds Polestar ceo Thomas Ingenlath.

The Chinese firm said its support to Polestar “will not require a reduction of Geely Holding shareholding in Volvo Cars.”

The companies did not say when the expected shareholding change could be completed.

Following the announcement, Volvo Cars’ shares jumped over 30% at market open. At 13:48 CET, the stock was trading at SEK 33.90, up 24.08% from the previous close.