Volvo Car has increased its stake in electric vehicle manufacturer Polestar to 19.9% from 9.8% through a debt conversion deal, the company announced. The ownership increase comes as Polestar implements significant changes to its manufacturing strategy.

Polestar has decided to consolidate production of its Polestar 3 electric SUV entirely in the United States, ending manufacturing of the vehicle in China. The company previously operated production facilities for the model in both countries.

The shift represents a strategic decision by Polestar to streamline its manufacturing operations for the large electric SUV. Company officials indicated that maintaining production at two separate sites no longer made economic sense for the vehicle.

Volvo's increased stake in Polestar reflects the ongoing relationship between the two automotive companies as the electric vehicle market continues to evolve. The debt conversion mechanism allowed Volvo to double its ownership position in the EV specialist.

The production consolidation and ownership changes come as automakers globally reassess their manufacturing footprints and investment strategies in the competitive electric vehicle sector.