Polestar Secures $300M Lifeline as Geely Steps In to Stabilize Finances

Polestar Automotive secured $300 million in new financing, giving the struggling electric vehicle brand temporary relief as losses mount and liquidity remains tight. The deal arrived alongside a separate agreement with its Geely parent network, underscoring growing urgency around Polestar’s balance sheet while buying management time to execute a broader turnaround strategy.

New financing and debt-to-equity move bolster liquidity

The $300 million financing was split evenly between Banco Bilbao Vizcaya Argentaria and Natixis, according to the company. Polestar also confirmed that Geely Sweden Holdings agreed to convert roughly $300 million of existing debt into equity, easing near-term repayment pressure and strengthening the automaker’s capital structure.

CEO Michael Lohscheller said the transactions “significantly enhance our liquidity position and help strengthen our balance sheet.” The financing followed an earlier announcement that Polestar secured a new credit agreement with a wholly owned Geely unit, providing access to a term loan of up to $600 million if needed, according to Transport Topics.

Despite operating under what it describes as an “asset-light” model, Polestar has accumulated nearly $8 billion in losses since inception. The fresh capital does not erase those losses, but it reduces immediate cash concerns as the company works to steady operations amid continued financial strain.

Turnaround efforts face tariffs, weak demand, and investor pressure

Polestar has been under mounting pressure since going public in 2022, with shares shedding nearly all of their value and falling another 60% this year. The Volvo Car offshoot remains largely controlled by Chinese billionaire Li Shufu through Zhejiang Geely Holding Group and related investment vehicles.

Since taking over as CEO last year, Lohscheller has focused on restoring financial discipline, including shifting Polestar toward a traditional dealership sales model and tightening costs. Those efforts have shown some operational progress, with recent quarterly results indicating improving vehicle volumes.

However, losses have continued to widen, and external challenges remain significant. Tariffs, soft U.S. demand, and delays in the company’s volume product pipeline have weighed on the turnaround. CFO Jean-Francois Mady previously told analysts that Polestar could not rely solely on bank debt and would need to raise additional equity, a warning that now appears to be materializing.

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