May 8, 2019 / 8:13 AM / 2 months ago

Defying Brexit, Volvo car brand Polestar picks UK for new development hub

STOCKHOLM, May 8 (Reuters) - Swedish luxury electric carmaker Polestar, which is jointly owned by Volvo Cars and its Chinese parent Geely, is setting up an R&D centre in Britain to develop future passenger cars, it said on Wednesday.

The move comes as Britain's impending exit from the European Union has dented UK car manufacturing, prompting several carmakers to cut local production and warn that Brexit was deterring suppliers and EU workers.

Polestar, whose cars are known for their signature Polestar gold seat belts, said there were no special considerations about Brexit in making its decision as the move was more about tapping existing engineering expertise in the UK.

Polestar intends to initially employ 60 engineers in Britain and expand its team over the rest of the year.

"Polestar's role as a technology spearhead requires new and developing skills in low-volume, light-weight, multi-material performance car engineering. The UK operation will allow us to take the next steps towards our future cars," R&D head Hans Pehrson said in a statement.

A spokesman for the company, which hopes to offer its cars largely via a monthly subscription model that covers insurance and maintenance cost, declined to say what segments or models they were exploring.

The company is currently manufacturing its only hybrid, Polestar 1, in China, and unveiled its mass market sedan, Polestar 2, a competitor to Tesla's Model 3, earlier this year.

It has also promised the market an electric coupe-style SUV, Polestar 3, in 2021, just after the expected launch of Tesla's Model Y SUV, with both carmakers betting that mass market customers are on the verge of adopting battery technology.

The UK site, whose cost will be borne by Polestar, will be the marquee's first independent facility, with the company having so far relied on Volvo for its R&D capacity.

The move comes as Volvo courts Chinese and U.S. tech investors to buy a stake in Polestar. Volvo Chief Executive Hakan Samuelsson hopes it will valued at a tech multiple like Tesla and Nio rather than auto incumbents. (Reporting by Esha Vaish in Stockholm Editing by Alexandra Hudson)

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