Volvo Shifts Polestar 3 Production Entirely To the US

Polestar and Volvo are ending Polestar 3 production in Chengdu, China, and consolidating all output of the electric SUV at Volvo’s plant in South Carolina. “The move to consolidate global Polestar 3 production in Charleston help[s] generate efficiencies for both companies, whilst also underscoring our confidence in the plant and the role it plays in our manufacturing footprint,” said Hakan Samuelsson, chief executive of Volvo Cars. “The U.S. 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.” Ars Technica reports: Volvo had a challenging 2025, with sales falling by 7 percent. Meanwhile, Polestar, which was spun out from the Swedish OEM’s performance arm into a standalone startup in 2017, had a rather good 2025, seeing a 34 percent increase in sales. So increasing the proportion of Polestar 3s to come out of South Carolina seems sensible. And as we learned last September, the midsize electric Volvo EX60 will also go into production at the South Carolina site later this year, and then we’ll see a still-unnamed hybrid Volvo in 2030.

The two companies also announced today that Volvo agreed to extend part of a shareholder loan it made to Polestar and will convert the rest into Polestar shares. Polestar will still owe Volvo $661 million, due at the end of 2031, and another $274 million will become Polestar stock now, with a further $65 million in the second quarter of the year. Since December, Polestar has also raised $1 billion through three equity financing investments.