Volvo ditching most of its stake in Polestar [Video]

Volvo on Friday said it planned to reduce its stake in Polestar by 62%, and cease funding the electric vehicle startup as it focuses funding its own transformation into a fully electric brand.

The shares in Polestar will be distributed to Volvo’s own shareholders, the biggest of which is Zhejiang Geely which owns 79.5% of the company. The move will give Geely more control of Polestar. Geely’s chairman, Li Shufu, is also a major shareholder of Polestar with a 39% stake.

At Polestar’s current share price, the shares are valued at around $921 million. After the close of the deal, Volvo will still retain about 18% of Polestar.

In a statement, Volvo CEO Jim Rowan said it was “logical” to retain some influence in Polestar given the close collaboration between the two companies.

Polestar, which was originally a Swedish racing team and then the performance arm of Volvo before becoming a standalone EV …