Volvo Cars is doubling down on its American manufacturing footprint. The Swedish automaker has announced plans to consolidate all global production of the Polestar 3 electric SUV (read our review here) at its plant in Ridgeville, outside Charleston, South Carolina — pulling the model out of its current production site in Chengdu, China.
The move is a statement of intent. Charleston is already home to Volvo’s fully electric EX90 SUV, and the two models share the same SPA2 platform, making the consolidation a logical step that the company says will generate efficiency gains for both Volvo Cars and Polestar. CEO Håkan Samuelsson framed it as a vote of confidence in the facility itself, describing the US as a critical market not just for sales, but as a strategic hub for regional and export production alike.
A plant with growing ambitions
The South Carolina facility has been quietly transformed over the past decade. Volvo has invested USD 1.3 billion into the site, which now carries an installed production capacity of 150,000 cars per year. Alongside the EX90 and the incoming Polestar 3, Volvo has already announced that its best-selling XC60 mid-size SUV will join the production line — and there is more to come.
Before 2030, the company plans to add an entirely new next-generation hybrid model to the Charleston lineup, one specifically designed to meet the demands of American buyers. It is the clearest signal yet that Volvo sees Ridgeville not as a regional outpost, but as a central pillar of its global manufacturing strategy.
Volvo converts debt into Polestar equity
The production announcement comes alongside a significant financial restructuring. Volvo Cars has agreed to convert approximately USD 274 million of its outstanding shareholder loan into Polestar equity — a move that strengthens Polestar’s balance sheet and extends its debt maturity profile at a critical moment for the electric vehicle brand.
The conversion is part of a broader refinancing effort. Geely Sweden Holdings AB had previously announced a separate debt-to-equity conversion of approximately USD 300 million, which has not yet been completed. Once that transaction closes, Volvo Cars intends to carry out a second, smaller conversion of approximately USD 65 million later in the second quarter, structured specifically to keep Volvo Cars’ ownership stake in Polestar at approximately 19.9%. The conversion price will be set at 95 percent of the 30-day volume-weighted average share price up to 27 March 2026.
The maturity of Polestar’s remaining shareholder loan — approximately USD 661 million — has also been extended to December 2031, giving the company considerably more financial runway than it had before.
Polestar CEO Michael Lohscheller welcomed the moves, pointing to the broader operational relationship between the two companies: the shared manufacturing infrastructure, commercial collaboration, and access to Volvo’s extensive service network for Polestar customers.
Why it matters
Taken together, the production consolidation and the financial restructuring paint a picture of two companies tightening their ties at a moment when the electric vehicle market remains under pressure. For Polestar, which has faced questions about its financial stability, the debt conversions and the loan extension provide meaningful breathing room. For Volvo, anchoring Polestar 3 production in Charleston reinforces a broader strategy of regional manufacturing — building cars closer to where they are sold, reducing exposure to trade friction and supply chain disruption.
With factories in China, Europe and the US, Volvo positions its global footprint as a deliberate hedge, one that allows it to shift production and optimise efficiency as market conditions evolve. A car built in South Carolina is a different proposition, commercially and politically, than one shipped from Chengdu — particularly at a time when the origins of electric vehicles and their components are under increasing scrutiny from policymakers on both sides of the Atlantic.
Whether driven by tariff strategy, operational logic, or long-term confidence in the US market, the direction of travel is clear: Volvo is building more of its future in America — and bringing Polestar along with it.
