Polestar announced a series of financial and operational updates aimed at strengthening its balance sheet and improving manufacturing efficiency, including a significant debt-to-equity conversion and plans to consolidate production of its Polestar 3 model in the United States.
Volvo Cars has agreed to convert approximately $274 million of its outstanding shareholder loan into equity in Polestar. This follows a previously announced approximately $300 million debt-to-equity conversion by Geely Sweden Holdings. Volvo Cars is also expected to carry out an additional conversion of about $65 million later in the second quarter, subject to regulatory approvals and agreed timelines.
Despite these conversions, Volvo Cars will maintain an ownership stake of around 19.9% in Polestar. The remaining approximately $661 million shareholder loan has had its maturity extended to December 2031, providing the company with improved financial flexibility and a longer debt maturity profile.
In parallel with these financial moves, Polestar and Volvo Cars plan to consolidate future manufacturing of the Polestar 3 in Charleston, South Carolina. This shift is intended to drive operational efficiencies and streamline production.
The conversion price for Volvo Cars’ equity stake will be set at 95% of the 30-day volume-weighted average price of Polestar shares up to March 27, 2026. The second, smaller conversion later in the year is designed to offset dilution effects from the earlier Geely transaction.
Polestar stated that these initiatives are part of a broader effort to reinforce liquidity, optimize its capital structure, and enhance collaboration with key strategic partners as it continues to scale its electric vehicle lineup globally.
KEY QUOTES
“We are grateful for the continued support from Volvo Cars in helping us to strengthen our balance sheet and reinforce our liquidity profile. Our strong operational collaboration with Volvo Cars continues through manufacturing, our commercial operations and offering our customers access to one of the most extensive service networks in the industry.”
Michael Lohscheller, CEO of Polestar
