Volvo Cars to convert about USD 274 million of its Polestar loan into equity, and Polestar says it intends to consolidate Polestar 3 manufacturing in Charleston

Polestar, in a press release carried on its investor relations site and dated 31 March 2026, Gothenburg, says Volvo Cars has agreed to convert approximately USD 274 million of its outstanding shareholder loan into Polestar's equity. The company frames the move, together with loan amendments, as strengthening its balance sheet and extending its debt maturity profile.

The release adds a second step and a deadline shift. Volvo Cars is expected to carry out a further debt-to-equity conversion later in the second quarter, totalling approximately USD 65 million, and the maturity of the remaining approximately USD 661 million shareholder loan has been extended to December 2031. The figures are as printed in the release and apply to Polestar, which is listed on Nasdaq under the ticker PSNY.

Why there is a second conversion

The document explains the sequencing. Volvo Cars' ownership in Polestar is expected to remain at approximately 19.9 per cent, and the second, smaller conversion is planned because a larger conversion by Geely Sweden Holdings AB, announced on 19 December 2025, has not yet been completed and will have a dilutive effect on Volvo Cars' shareholding. The second conversion is subject to agreed deadlines and necessary regulatory approvals.

The pricing of the conversion is also set out in the release: the conversion price will be set at 95 per cent of the 30-day volume-weighted average price in Polestar shares up to 27 March 2026.

The Polestar 3 manufacturing plan

Alongside the capital-structure news, the release states an intention to consolidate future manufacturing of the Polestar 3 in Charleston, South Carolina, USA, which Polestar says is to drive efficiencies. The wording matters: the company announces an intention, not a completed switch of production. The same release describes Polestar's vehicles as currently manufactured on two continents, North America and Asia, with production of the planned Polestar 7 intended for Europe.

What the parties say

Polestar chief executive Michael Lohscheller is quoted in the release welcoming Volvo Cars' continued support, pointing to the balance sheet, liquidity profile, and an ongoing operational collaboration covering manufacturing, commercial operations and access to a service network. That is a statement from the issuer, not an independent assessment.

The shape of the deal, as the release stated on 31 March 2026

• What is agreed now: Volvo Cars agreed to convert approximately USD 274 million of its outstanding shareholder loan into Polestar's equity, per the 31 March 2026 release.
• What follows later in Q2: a further conversion of approximately USD 65 million, expected later in the second quarter, subject to agreed deadlines and necessary regulatory approvals.
• What is extended: the maturity of the remaining approximately USD 661 million shareholder loan, extended to December 2031.
• What stays the same: Volvo Cars' ownership in Polestar is expected to remain at approximately 19.9 per cent.
• What is an intention only: consolidating future Polestar 3 manufacturing in Charleston, South Carolina, USA.

The release also carries a forward-looking statements caution stating that such statements speak only as of the date they are made and Polestar assumes no obligation to update them, even if new information becomes available, except as may be required by law. Whether the second conversion is completed on the stated timetable, and whether the Charleston intention is realised, can accordingly be checked only against Polestar's own subsequent filings and announcements.