Luxury EV maker Polestar taps Volvo Car and China’s Geely for more funding
POLESTAR Automotive Holding is getting more cash from its key backers as the electric vehicle (EV) maker aims to more than double production over the next two years.
Volvo Car is committing US$200 million in new financing and an affiliate of China’s Zhejiang Geely Holding Group is providing an additional US$250 million, Polestar said on Wednesday (Nov 8). Both patrons also are extending existing loans by three years till 2027.
The luxury EV maker aims to break even on a cash-flow basis by 2025, it said, by which time it projects annual production to reach at least 155,000 vehicles.
For the current year, Polestar cut its production forecast to about 60,000 vehicles, down from a May projection for as many as 70,000 and an initial goal of 80,000.
The company, whose largest shareholder is Chinese billionaire and Geely Holding chairman Li Shufu, has been struggling to gain market share due to delays and increased competition.
Polestar also posted provisional figures for an adjusted loss of US$214 million before interest, taxes, depreciation and amortisation in the third quarter – more than the US$176 million it lost a year ago.
The company blamed falling gross profit margins on higher inventories and supply-chain issues for batteries and semiconductors. Revenue in the quarter rose 41 per cent from a year ago to US$613.2 million on greater sales volumes and price increases.
The injection of cash from Volvo and Geely Holding comes with an optional equity conversion feature, Polestar said. It hinted at the move last month in a securities filing, which said the company may seek to raise as much as US$1 billion in additional funds.
Polestar was previously a subsidiary of Sweden’s Volvo Car, which itself is owned by Geely. BLOOMBERG
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