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Following the release of Polestar's preliminary unaudited financial and operational results for 2023 today Volvo Cars announces that the company estimates that the total net effect on Volvo Cars' financial results will be non-material. The total net effect is a result of the combination of Polestar's 2023 results and the change in our ownership percentage in Polestar.
The announcement from Polestar today included impairment charges of approximately 450 MUSD in total. Due to the timing of Polestar's FY 2023 Report the impairment charges were not known to Volvo Cars at the time when Volvo Cars 2023 full year result was reported.
Volvo Cars will include an adjustment in its second quarter results 2024 that will be based on Volvo Cars ownership of 48.3 % as of year-end 2023. It will, however, be largely offset by positive effects in the second quarter 2024 from the distribution of Polestar shares and decreased ownership to 18%, which was completed on 8 May 2024. The positive effects mainly relate to release of previously eliminated internal profits based on the change of ownership share.
The adjustments for Volvo Cars do not include any effects from Polestar's undisclosed first half year operational results.
The total net effect from the Polestar 2023 driven adjustments and the change of ownership, is estimated to be non-material for Volvo Cars. This will be accounted for as part of the result from JVs and associates in the second quarter 2024, which will be released on July 18, 2024.