Volvo Halts Polestar Funding, Refocuses on Own EVs

Volvo Slows Down: EV Sales Lag

The news comes from a Swedish brand owned by a Chinese group. Volvo is cutting funding to Polestar and retreating to its own electric car lineup, according to the link at the top of the thread. The reason cited is simple and unheroic: sales are not keeping up. The company is not alone in this retreat. The same report mentions two moves pointing in the same direction: Hertz is selling off a third of its electric fleet, and Ford is cutting production of the F-150 Lightning. Three distinct signs of the same cooling trend.

What is surprising is where the slowdown originates. It is not signed by a struggling European manufacturer, but by a brand with an Asian owner and a rental fleet that bought big when the narrative was trending the other way. When cheap money ran out, enthusiasm lost its arguments.

What Peine with Volvo and Polestar

The decision being reported is to cut funding to Polestar because Volvo has its own line of electric vehicles. The parent brand concentrates effort on its catalog and stops supporting a second label that, in practice, was competing against itself. A pruning move, not a closure.

Some read it as prudence: focusing on the prestigious brand and image without duplicating structures. The most repeated criticism is that Polestar never made sense, especially in Europe, where the market share is small and consumers are hesitant. The conclusion that emerges is that there was no market for two electric brands from the same group fighting for the same buyer.

Why Electric Car Sales Are Sinking

The most repeated argument is price. The electric car is better in almost everything, but range and cost remain the wall. And price is not a minor detail: for most buyers, it is the deciding variable. An electric Clio at €28,000 is the figure that sums up the problem.

The second pillar is infrastructure. The charging network is sparse, range is ridiculous for travel, and repair costs, when they arrive, are described as pavor movie material. Added to this is maintenance: it was promised that an electric car, with thousands fewer parts, would be easy and cheap. It is not. Over-engineering and proprietary parts with no alternative suppliers drive up the bill.

The Eco-Conscious Buyer Who Buys Gasoline

The anecdote that best captures the moment is that of a textbook environmentalist, one who sends videos about the environmental tragedy, who just bought a gasoline SUV. His reason: the same model in plug-in hybrid jumped in price. The case is real and not unique. Another neighbor recounts how his daughter, educated in classroom environmentalism, got her license and bought a 1.6-liter, 90-horsepower gasoline car. She discovered what it meant to go wherever she wanted, and the discourse collapsed on its own.

The thesis hovering is uncomfortable: when things are free, we are all exemplary citizens. When it hits the pocket, things change. Manufacturers know this too, which is why they adjust production to what sells, not to what is preached.

Chinese Electric Cars and the European Industry

While Western brands cut back, Chinese giant BYD increased its sales by 62% in 2023. The paradox is that the European retreat coincides with the Asian push. The strategic reading is that China favors electric vehicles for energy independence: it has no oil of its own and wants to stop depending on those who do.

The warning for Europe is serious. The electric vehicle is described as the grave of the European industry if the transition is forced without a grid, without price competitiveness, and without demand. The warning includes the moment when oil consumption starts to fall: the hole it would leave in public accounts and industry would be biblical in proportion.

The Battery That Never Arrives

The star argument of defenders is always the same: when the battery with 1,000 kilometers of real range that charges in ten minutes comes out, thermal engines are finished. The skeptical response is that this battery has been about to come out for fifteen years. And there is a physical limit that repeats itself: there are not enough materials on Earth to manufacture these batteries for all cars, nor energy to power them.

The most disturbing data point is the real footprint. A study attributed to Volvo indicated that, depending on the electricity mix used for charging, an electric car could take up to 200,000 kilometers to start becoming emission-neutral, because its manufacturing emits much more CO2 than that of a thermal engine. The full calculation, including grid composition and mileage, yields a difference that surprises those who read it thoroughly.

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The question remains about what happens with cars already on the road. The doubt raised is whether a used electric car will be sellable or end up like Blu-ray: technology obsolete before amortization. With prices where they are and the network where it is, nobody has the answer. The market, meanwhile, has already voted.