On the Dash:
- Polestar secured $300 million in financing and converted $300 million of debt into equity to improve liquidity.
- The EV maker has lost nearly all market value since its 2022 IPO and has accumulated $8 billion in cumulative losses.
- Soft demand, tariffs, and production delays continue to pressure Polestar’s financial turnaround despite new funding.
Polestar has secured $300 million in new financing and will convert roughly $300 million of debt into equity, giving the cash-burning electric vehicle maker critical support as it navigates heavy losses and shrinking liquidity. The equity investment is split evenly between Banco Bilbao Vizcaya Argentaria SA and Natixis, according to the company.
The transactions follow Polestar’s finalization of a new credit agreement with a wholly owned Geely unit for a term loan of up to $600 million. The deals bolster the company’s cash position and provide more time to execute its turnaround plan, which aims to stabilize operations and improve financial discipline.
Despite its asset-light business model, Polestar has accumulated approximately $8 billion in losses since its founding. The Volvo Car AB offshoot, largely controlled by Chinese billionaire Li Shufu through Zhejiang Geely Holding Group, has lost nearly all of its market value since going public in 2022. Polestar’s stock has fallen another 60% this year amid soft U.S. demand, tariffs, and delays in its volume pipeline.
Since assuming leadership last year, Polestar CEO Michael Lohscheller has shifted the company to a traditional dealership model and implemented cost-cutting measures. Quarterly results show improving vehicle volumes but continued widening losses, underscoring the challenges the company faces as it competes in the crowded EV market.
Polestar’s CFO indicated in November that additional equity would be required, signaling ongoing funding needs despite the latest infusion. The new financing and debt conversion are expected to stabilize the balance sheet, allowing the company to focus on long-term growth.
