Volvo Cars and Polestar plan to move all global Polestar 3 production to Volvo’s manufacturing facility in Ridgeville, outside Charleston, South Carolina. The electric SUV is currently also built in Chengdu, China. The consolidation accompanies a significant financial restructuring between the two Geely-controlled brands.
Highlights
- Production shift: All Polestar 3 manufacturing will move to Volvo’s South Carolina plant, ending dual production in China.
- Shared platform advantage: The Ridgeville facility already builds the Volvo EX90 on the same SPA2 architecture that underpins the Polestar 3.
- Financial restructuring: Volvo Cars is converting approximately $274 million of its Polestar shareholder loan into equity, with an additional $65 million conversion expected in Q2 2026.
- Plant expansion: The XC60 and a new next-generation hybrid model will also join the South Carolina production line before 2030.
Why South Carolina
The Ridgeville plant already serves as Volvo’s global production hub for the fully electric EX90 SUV. Both the EX90 and Polestar 3 share the SPA2 platform, making the consolidation a logical efficiency play. Volvo has invested $1.3 billion in the facility over the past decade, bringing installed capacity to 150,000 vehicles per year.
The move also carries trade implications. Chinese-made vehicles exported to the United States currently face tariffs exceeding 100%. By centralizing Polestar 3 production in the U.S., both companies eliminate tariff exposure on American-bound units and establish a tariff-free export base for other markets.
“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 Håkan Samuelsson, chief executive of Volvo Cars. “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.”
Broader Plant Roadmap
Beyond the Polestar 3, Volvo Cars previously announced plans to add its best-selling XC60 mid-size SUV to the South Carolina line. A new next-generation hybrid model designed specifically for the U.S. market will follow before 2030. Together, these additions position Ridgeville as a central pillar of Volvo’s global manufacturing strategy rather than a regional outpost.
Polestar Capital Restructuring
Alongside the production announcement, Volvo Cars agreed to convert approximately $274 million of its outstanding shareholder loan into Polestar equity. A second conversion of roughly $65 million is expected later in Q2 2026, bringing Volvo Cars’ ownership stake in Polestar to approximately 19.9%.
The restructuring follows a previously announced $300 million debt-to-equity conversion by Geely Sweden Holdings AB. The maturity of Polestar’s remaining shareholder loan of approximately $661 million has been extended to December 2031, providing the EV brand with longer-term financial flexibility.
“We are grateful for the continued support from Volvo Cars in helping us to strengthen our balance sheet and reinforce our liquidity profile,” said Polestar CEO Michael Lohscheller. “Our strong operational collaboration with Volvo Cars continues through manufacturing, our commercial operations and offering our customers access to one of the most extensive service networks in the industry.”
Geely Integration Accelerates
The production consolidation and financial moves signal tighter integration across Geely Holding’s portfolio. Earlier this week, Volvo Cars announced it would become the exclusive European distributor for Lynk & Co, another Geely sister brand. Separately, Volvo and Polestar have signed a memorandum of understanding to build the upcoming Polestar 7 compact SUV at Volvo’s new plant in Košice, Slovakia.
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