Polestar Automotive Holding UK PLC – a Swedish electric performance car brand – announced that it has secured $950 million in external funding. And the company is making strong progress on its strengthened business plan and achieving its 2025 targets.
The funding is being provided by 12 leading international banks including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB, in the form of a three-year loan facility. And it provides Polestar with the funds it requires to finance its next development stage and covers a large majority of its estimated financing needs. The cash on the balance sheet as at December 31, 2023 was about $770 million.
The financing that has now been agreed will be accompanied by a comprehensive efficiency program from Polestar. Among additional measures, 10% of jobs have been cut since mid-2023, with a further 15% to follow this year. Polestar has made significant progress on its strengthened business plan and 2025 targets: achieving cash flow break-even, annual volume of over 155,000 and a gross margin in the high teens.
At the same time, Polestar also expanded its model range with two high-margin SUVs. And the Polestar 4 sales are accelerating around the world, Polestar 3 has now started production in China and has also completed test production runs in South Carolina, USA. The prototype production of Polestar 5, a progressive performance GT, will also accelerate in 2024.
Along with the secured $950 million in external funding, the recently announced new shareholder structure in Polestar provides a solid basis for the brand’s further business development. And under the new structure, Geely Sweden Holdings will become the second largest shareholder and Volvo Cars intends to retain an 18% stake.
At the end of this year, Polestar expects volume growth that supports the 2025 volume target and a double-digit gross profit margin. And volume and margin progression are expected to be weighted towards the second half of 2024, as the two SUVs reach full production and global distribution.
Polestar is adjusting the release date for the preliminary unaudited financial and operational results for the full year 2023 to a later date.
KEY QUOTES:
“Securing funding from a syndicate of global banks reflects our partners’ support for Polestar’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.”
“This marks a new phase in Polestar’s business. The efforts of recent years are paying off: We improved our cost basis, secured financing and are ramping up our product offensive. Both SUVs now sharpen the brand, target one of the fastest growing segments in the industry and position us for strong volume growth and profit margin progression from the second half of 2024,” he adds.
– Thomas Ingenlath, Polestar CEO
“As a strategic partner and direct shareholder in Polestar, Geely will continue to provide full operational and financial support to the iconic performance car brand going forward. We will retain our shares in Polestar and intend to participate in future financing activities when required. Polestar will have full access to technologies and engineering expertise from Geely Holding to realise its global growth targets.”
– Daniel Li, Geely Holding Group CEO and Polestar Board Member
