Swedish EV manufacturer Polestar receives €877M funding boost from global banks

In a significant development, Gothenburg-based electric vehicle manufacturer Polestar has secured €877M (approximately $950M) in external funding as a three-year loan facility.

Twelve prominent international banks, including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC, and SPDB, have provided the financing, demonstrating their confidence in Polestar’s future.

Polestar’s Business Targets and Upcoming Models

The funds will be allocated towards the company’s upcoming development stage and financing requirements. As of December 31, 2023, Polestar’s cash balance stood at approximately €710M.

Thomas Ingenlath, CEO of Polestar, expressed gratitude towards the banking partners, emphasising their support as a testament to Polestar’s growth trajectory.

To achieve its desired goals by 2025, the Swedish business aims to break even in terms of cash flow, surpass an output of 155,000 units per year, and elevate its gross margin above 15%.

Production of the Polestar 3 has commenced in China, while the Polestar 4 is being introduced in phases throughout 2023 and into 2024. Significant advancements in the manufacturing of Polestar 5 prototypes are anticipated in 2024.

Geely Holding Group’s Continued Support for Polestar

Geely Holding Group, a significant shareholder, will continue to provide operational and financial support to the premium EV brand moving forward.

Polestar’s new ownership composition includes Geely Sweden Holdings as its second largest investor with a sizeable holding, alongside Volvo Cars with an 18% ownership interest.

Daniel Li, CEO of Geely Holding Group and a Polestar Board Member, reaffirmed his company’s commitment to supporting Polestar in achieving its global growth targets.

Established as a collaboration between Volvo Cars and Geely Holding in 2017, Polestar has emerged as a renowned Swedish company specialising in top-tier electric vehicles.

By 2026, Polestar plans to offer five performance EV models, with a long-term goal of manufacturing cars with net-zero carbon emissions by 2030.