Sweden's Volvo Car Corp. unveiled its first Polestar model on Tuesday and said that it will jointly invest 5 billion yuan ($751 million) in the brand with its Chinese parent as it joins a growing list of manufacturers looking to take on electric-car pioneer Tesla Inc. (TSLA).
In June this year, Volvo said its Polestar performance brand was becoming a standalone business, focusing purely on electrified high-performance cars. The new electric cars will drop the Volvo badge and be branded as Polestar, but will maintain ties with each other to enjoy technological and engineering synergies and economies of scale.
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Tesla is the clear market leader in electric cars, having delivered 24,500 vehicles in the third quarter of 2017, but other luxury brands are starting to plot their introduction into the field. Jaguar has announced its I-Pace concept car which is earmarked for sale sometime next year while Audi AG's (NSU.XE) E-tron Sportback concept vehicle will go into production from 2019. Mercedes has launched its own electric vehicle brand, EQ, with cars expected to start production by the end of the decade.
The investment announced by Volvo and its Chinese parent on Tuesday will go toward a new manufacturing facility in Chengdu, southwest China, where they will develop the Polestar 1, a 600-horsepower, two-door, four-seater hybrid coupe with a pure electric range of 150 kilometers.
The Polestar 1 will go into production in Chengdu in mid-2019, followed by a smaller Polestar 2 model later in 2019, the companies said. The Polestar 2 will be the company's first fully electric car.
Volvo, owned by China's Zhejiang Geely Holding Group Co., bought Polestar in 2015 but Volvo and Polestar have worked together in motor sport for more than 20 years.
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(END) Dow Jones Newswires
October 17, 2017 08:16 ET (12:16 GMT)