Sunday, April 21, 2024
NewsPolestar Receives U.S. $950 Million Funding from Twelve Banks

Polestar Receives U.S. $950 Million Funding from Twelve Banks

Polestar has secured funding in the form of a three-year loan from international banks.

  • The Swedish EV maker says this three-year loan will help it finance the next stage of its development.

  • Polestar aims to achieve cash flow break-even in 2025.

  • The company will also continue its efficiency program which will see it cut a further 15% of jobs.

Following the announcement that Volvo would sell its shares into Polestar, there have been some concerns about the financial stability of the smaller Swedish EV maker.

These concerns have been addressed, at least for now, since Polestar has received external funding to the tune of U.S. $950 million.

This three-year loan has been granted by 12 international banks, including HSBC and SPDB, and according to Polestar, it will help finance the next stage of its development.

In addition to this loan, Polestar will continue to benefit from the support of Geely, and unlike previously thought, it appears Volvo Cars will keep an 18% stake in the company.

With the help of the new loan, Geely, and the launch of two electric SUVs this year, Polestar aims to achieve cash flow break-even in 2025 along with a sales volume of 155,000 vehicles per year.

To further improve its financial situation, the company will continue its efficiency program, which has already seen it cut 10% of jobs since the middle of 2023.

According to Polestar, this will result in a further 15% of jobs being deleted, which should significantly lower its human resource expenses.

While the viability of the company has been assured for the next three years, it will be interesting to see if the addition of the Polestar 3 and Polestar 4 SUVs will bring enough buyers for the automaker to become profitable on its own after the money is due to be returned.

There are some doubts about this since the EV market has been on a decline in the last few months, and Polestar has been hit particularly hard due to it only having one sedan to offer.

On the other hand, if the economy recovers in the next year or two, electric vehicles could become attractive to a larger audience and thus ensure success for Polestar.

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