Polestar has announced it has received US$950 million (RM4.5 billion) in external funding, a month after Volvo announced it would invest in the company. will stop providing funds to Polestar and transferring responsibility for the electric vehicle brand to parent company Geely.
There used to be one Volvo’s performance division before become an electric vehicle brand, Polestar’s separation from Volvo meaning the two brands now sit side by side within Geely. In the new structure, Geely Sweden Holdings will become the second largest shareholder and Volvo Cars plans to retain an 18% stake.
The secured funding is being provided by 12 international banks including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB, through a three-year loan facility and will provide Polestar with the necessary funds to finance support the automaker’s next phase. development, it said.
“Securing funding from a consortium of global banks reflects the support of our partners for Polestar’s growth. Together with Geely’s full financial support and access to cutting-edge technology and engineering expertise, we have solidified our path towards cash flow breakeven by 2025,” CEO Polestar, Thomas Ingenlath, said.
“As a strategic partner and direct shareholder of Polestar, Geely will continue to provide full financial and operational support to the iconic performance car brand into the future. We will retain our shares in Polestar and intend to participate in future financing activities as required. Polestar will have full access to technologies and engineering expertise from Geely Holding to realize its global growth goals,” said Daniel Li, Group CEO of Geely Holding and member of the board of directors. Polestar said.
Polestar is in a difficult situation, yes failed to meet its 2023 sales target and needed to cut 15% of its workforce. Securing the automaker’s funding puts it in a better position to achieve its goals for 2025, it said, which are to reach a cash flow break-even point, annual sales above 155,000 and Gross margins are in the teens.
Through North Star 3 has been delayed due to software-related issues from Volvo, the new corporate structure will allow Polestar to lead the development of future models without necessarily being dependent on Volvo, reports DriveAdditionally North Star 4 still on the way to introduction.
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