(Yicai) April 16 -- Electric vehicle brand Polestar Automotive Holding and technology firm Xingji Meizu Group, both owned by Chinese carmaker Geely Automobile Holdings, have agreed to end their partnership.

Polestar and Xingji Meizu signed a deal to terminate their joint venture Polestar Times Technology (Nanjing) and transfer the distribution rights to Polestar, the EV maker said in a filing to the United States Securities and Exchange Commission on April 10.

The JV will settle any outstanding financial obligations and remaining liabilities against its business partners, including external investors, before ceasing operations, Polestar noted.

The agreement also includes the transfer of certain digital and other assets from the JV with arms-length consideration agreed by the parties to allow Polestar to resume sales, customer service, and distribution activities in the Chinese market, the firm added.

“The parties are terminating the business of the JV as a result of a change in market focus and strategy,” Polestar explained. “Polestar will remain fully committed to the Chinese market and will continue to pursue its long-term strategy for growth and innovation, whilst protecting its premium brand position in China.”

Polestar and Xingji Meizu set up Polestar Times in June 2023, with the former owning 49 percent and the latter the remaining 51 percent. The JV was responsible for vehicle design, research and development, software development, and sales.

Polestar is facing some difficulties in the Chinese market, mainly because of a lack of proprietary technology and insufficient product competitiveness, according to industry insiders. Given China’s highly competitive automotive market, the brand’s survival prospects continue to narrow.

Polestar has four EV models on sale in China, having sold only 6,447 units from 2021 to the first half of last year. Meanwhile, its losses continued to surge, exceeding USD20 billion between 2021 and 2023.

Last year, Polestar laid off 15 percent of its global staff to cut costs and ensure survival. But in February, reports about more layoffs and rumors of an exit from the Chinese market started circulating. The firm claims its operations remain stable.

Editor: Futura Costaglione