GOTHENBURG, SWEDEN – In a move that screams “watch out, world!”, Polestar Automotive Holding UK PLC has pocketed a cool USD 950 million in external funding, nearly hitting the billion-dollar mark and revving up its journey towards its ambitious 2025 targets. This cash infusion comes from a league of 12 global banking giants, including the likes of BNP Paribas and HSBC, through a three-year loan facility that’s set to turbocharge Polestar’s next development phase.
With its cash reserves bulging to about USD 770 million as of the end of last year, Polestar is all geared up for a high-speed chase towards profitability. Thomas Ingenlath, Polestar’s CEO, couldn’t hide his excitement, stating that the support from the global banks is a big thumbs up for Polestar’s growth trajectory. “With Geely’s backing, we’re hitting the accelerator on our path to cash flow break-even by 2025,” he declared.
Geely Holding Group, not content with just being a cheerleader, has promised full operational and financial support to Polestar. Daniel Li, CEO of Geely Holding and a Polestar Board Member, emphasized their commitment to keeping Polestar in the fast lane, mentioning that Geely would continue as a strategic partner and major shareholder, ready to jump in with more funds whenever needed.
But it’s not all about splashing cash. Polestar has been trimming the fat, cutting 10% of its jobs since mid-2023 and planning to slash another 15% this year, all part of a comprehensive efficiency drive. These moves, coupled with the launch of two high-margin SUVs, are set to catapult Polestar towards its goal of selling over 155,000 vehicles annually by 2025 and achieving a gross margin in the high teens.
The Polestar 4 is already making waves globally, while the Polestar 3 has kicked off production in China and is warming up in South Carolina, USA. Not to be left behind, the Polestar 5, a progressive performance GT, is gearing up to hit the roads in 2024.
This financial and strategic muscle-flexing has been further bolstered by a reshuffle in shareholder structure, making Geely Sweden Holdings the second-largest stakeholder, while Volvo Cars clings to an 18% share, solidifying Polestar’s position in the automotive arena.
Ingenlath summed it up with a nod to the future, highlighting the pivotal role of the new SUVs in sharpening Polestar’s brand and driving volume and profit margin growth, especially in the latter half of 2024. With eyes on a double-digit gross profit margin by year-end, Polestar is not just speeding towards its 2025 goals but is all set to zoom past them.
