Gothenburg-based Polestar, a premium electric vehicle firm, announced on Wednesday that it has secured $950M (approximately €877M) as a three-year loan facility.
The funding was provided by 12 leading international banks, including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC, and SPDB.
The Swedish company intends to use the raised funds to finance its next development stage, which covers its financing requirements.
Cash on the balance sheet as of 31 December 2023 was approximately $770M (approximately €710M), says the company.
Thomas Ingenlath, Polestar CEO, says, “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.”
Polestar’s roadmap
The financing agreement will be accompanied by a comprehensive efficiency program from Polestar, which includes a 10 per cent job cut since mid-2023 and an additional 15 per cent cut this year.
The company has made significant progress towards its strengthened business plan and 2025 targets, including achieving cash flow break-even, an annual volume of over 155,000, and a gross margin in the high teens.
At the same time, Polestar was able to expand its model range with two high-margin SUVs.
The Polestar 4 sales are accelerating around the world, Polestar 3 has now started production in China and has also completed test production runs in South Carolina, USA.
Prototype production of Polestar 5, a progressive performance GT, will also accelerate in 2024.
Polestar has recently announced a new shareholder structure that will provide a strong foundation for the brand’s further business development.
Under the new structure, Geely Sweden Holdings will become the second largest shareholder, while Volvo Cars will retain an 18 per cent stake.
Daniel Li, Geely Holding Group CEO, and Polestar Board Member, says: “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.”
Polestar: Premium electric performance vehicle manufacturer
Founded in 2017 by Volvo Cars and Zhejiang Geely Holding, Polestar is a global pure-play, premium electric performance vehicle manufacturer. Polestar plans to have a line-up of five performance EVs by 2026. The company aims to produce a truly climate-neutral car by 2030.
The Polestar 1 is a low-volume electric performance hybrid GT with a carbon fibre body producing 609 HP and 1,000Nm of torque. It has an electric-only range of 124 km (WLTP).
Polestar 2, the electric performance fastback, was launched in 2019.
Polestar 3, the SUV for the electric age, launched in late 2022.
Polestar 4, the SUV coupé transformed, is launching in phases through 2023 and into 2024.
Polestar 5, an electric four-door GT, and Polestar 6, an electric roadster, are coming soon.
“This marks a new phase in Polestar’s business,” says Thomas Ingenlath. “The efforts of recent years are paying off: We improved our cost basis, secured financing, and are ramping up our product offensive. Both SUVs now sharpen the brand, target one of the fastest growing segments in the industry, and position us for strong volume growth and profit margin progression from the second half of 2024,” adds Ingenlath.
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