Dive Brief:
- Volvo Car Group sold a 30% stake in automaker Lynx & Co., the company announced in a Nov. 14 press release.
- Volvo Cars jointly operates Lynx & Co. with its parent company Geely Auto Group, and its 30% equity stake in the company was valued at 5.4 billion yuan ($747.4 million) on the day of the announcement.
- The automaker’s divestment in Lynx & Co. is part of a new ownership structure and the next phase of development for the brand, according to the release. However, Volvo Cars will continue to focus on future strategic collaborations with Lynx & Co. in selected markets that could benefit both companies.
Dive Insight:
Following Volvo’s divestment, Geely-owned EV brand Zeekr, which is headquartered in Hangzhou, China, is taking a majority stake in the company as part of a new ownership structure. Zeekr was established by Geely in 2021 as a premium brand to compete with luxury automakers like Tesla, Audi, and BMW. The company is acquiring Lynx & Co. shares held by both Geely and Volvo.
Lynx & Co. was established in 2017 and is largely focused on the emerging electric vehicle market in China. Volvo has been a minority shareholder since the company launched as a jointly operated vehicle brand. Lynx & Co. is headquartered in Gothenburg, Sweden and its vehicles are manufactured by Geely in China.
Volvo Cars will receive an upfront cash payment equal to 70% of its 5.4 billion yuan stake in Lynx & Co. when the sale is finalized, with the remaining 30% to be paid one year later, according to the release.
The transaction is expected to close during the first quarter of 2025 and is still subject to approval during a special Volvo Cars’ shareholders meeting, which is scheduled in Q1 of 2025. It’s also subject to other regulatory approvals.
Although Lynx & Co. remains focused on launching new high-tech EVs in China to compete with brands like BYD and Tesla, it offers both hybrid and traditional combustion engine models as well. The company’s latest vehicle is a fully electric model dubbed the “02”, which delivers a driving range of 276 miles.
Volvo also jointly operates EV brand Polestar with its parent Geely. In August, Polestar kicked off production of the Polestar 3 at Volvo Cars’ South Carolina assembly plant. Polestar is actively working to grow its U.S. manufacturing presence ahead of expected new tariffs on electric vehicles.
