Polestar, the Gothenburg-based premium electric vehicle manufacturer, has announced securing a substantial $950M (approximately €877M) through a three-year loan facility. This strategic financial boost was provided by a consortium of 12 leading international banks, including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC, and SPDB, marking a significant milestone in the company’s journey towards further growth and development.
The Swedish company plans to utilize the raised funds to finance its next development stage, covering its financing requirements comprehensively. With a cash balance of approximately $770M (around €710M) as of December 31, 2023, Polestar is well-positioned to continue its trajectory towards becoming a leader in the electric vehicle market.
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A Vote of Confidence from Global Banks
Thomas Ingenlath, CEO of Polestar, expressed gratitude for the syndicate of global banks’ support, highlighting it as a testament to their partners’ confidence in the company’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,” Ingenlath stated.
Roadmap and Efficiency Program
The financing agreement is part of a broader strategy that includes a comprehensive efficiency program, which has seen a 10% job cut since mid-2023 and an additional 15% reduction planned for this year. Despite these measures, the firm has made significant strides towards its strengthened business plan and 2025 targets, which include achieving cash flow break-even, an annual volume of over 155,000, and a gross margin in the high teens.
The EV Manufacturer has also expanded its model range with two high-margin SUVs, with Polestar 4 sales accelerating globally, Polestar 3 starting production in China, and test production runs completed in South Carolina, USA. Prototype production of Polestar 5, a progressive performance GT, is set to accelerate in 2024.
A New Shareholder Structure
The firm recently announced a new shareholder structure, providing a strong foundation for further business development. Under this structure, Geely Sweden Holdings will become the second-largest shareholder, while Volvo Cars will retain an 18% stake. Daniel Li, CEO of Geely Holding Group and Polestar Board Member, reaffirmed Geely’s commitment to providing full operational and financial support to the premium electric vehicle firm, ensuring access to technologies and engineering expertise from Geely Holding to realize its global growth targets.
With this significant funding round, the swedish company is poised to continue its mission of producing premium electric vehicles, driving innovation in the EV market, and contributing to the global transition towards sustainable mobility.
