Polestar secures RM4.5 billion in external funding

Polestar has secured US$950 million (RM4.5 billion) in external funding, the company has announced, a month after Volvo announced that it will stop providing funds to Polestar and transfer responsibility of the EV brand to parent firm Geely.

Previously having been a performance division of Volvo before becoming an EV brand, Polestar’s separation from Volvo means that the two brands now site side-by-side within Geely. In the new structure, Geely Sweden Holdings will become the second largest shareholder, and Volvo Cars intends to retain an 18% stake.

The funding that has been secured is being provided by 12 international banks including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB, through a three-year loan, and will provide Polestar with the funds required to finance the carmaker’s next stage of development, it said.

“Securing funding from a syndicate of global banks reflects our partners’ support for Polestar’s growth course. Together with Geely’s full financial support and access to innovative technology and engineering expertise, we have reinforced our path towards cash flow break-even targeted in 2025,” said Polestar CEO Thomas Ingenlath.

“As a strategic partner and direct shareholder in Polestar, Geely will continue to provide full operational and financial support to the iconic performance car brand going forward. We will retain our shares in Polestar and intend to participate in future financing activities when required. Polestar will have full access to technologies and engineering expertise from Geely Holding to realise its global growth targets,” said Daniel Li, Geely Holding group CEO and Polestar boardmember.

Polestar has been in a tough position, having missed its 2023 sales target and needing to cut 15% of its workforce. The carmaker’s securing of funding puts it in a better position to achieve its targets for 2025, which is to achieve cash flow break-even, annual volume of over 155,000 and a gross margin in the high teens, it says.

Though the Polestar 3 has been delayed due to software-related issues from Volvo, the new company structure would allow Polestar to lead development on future models without necessarily having to bank on Volvo, reports Drive, adding that the Polestar 4 remains on track for introduction.

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