Polestar Partners With Volvo Cars To Expand Manufacturing Into Europe

EV maker Polestar (PSNY) said on Thursday that it will manufacture its Polestar 7 SUV, slated for launch in 2028, at a Volvo Cars factory in Kosice, Slovakia.

The company said that it has signed a memorandum of understanding with Volvo Cars, which it has chosen as development and manufacturing partner for Polestar 7. Both Volvo Cars and Polestar are controlled by China’s Geely.

While offering design and performance characteristics unique to Polestar, the Polestar 7 compact SUV will share a technology base with two forthcoming Volvo models and use architectures from within Geely.  

Construction started on the Volvo Cars factory in Košice in 2023. The plant is currently under construction, and it will be Volvo Cars’ third manufacturing plant in Europe. It has an annual production capacity of 250,000 cars.

The Polestar 7 is currently planned to be the second car to be built at the Košice plant after a yet-to-be-announced Volvo model.

Polestar CEO Michael Lohscheller said that working with Volvo Cars to develop and manufacture the SUV in Europe is a “unique opportunity” to strengthen the brand’s position in its home market.

Polestar currently manufactures vehicles in China and the United States. In April, the company paused its financial guidance for 2025, citing current uncertainty surrounding international tariffs and government regulations impacting its business and market dynamics.

Polestar faces tariffs of 28.8% for the cars it imports into Europe and more than 100% for any it imports into the United States.

Polestar is looking to diversify its manufacturing footprint and also plans to make the Polestar 4 for the North American market in South Korea in the second half of 2025.

On Stocktwits, retail sentiment around PSNY jumped from ‘bullish’ to ‘extremely bullish’ over the past 24 hours while message volume remained at ‘high’ levels.

PSNY stock is up by about 4% this year and by over 22% over the past 12 months.

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