Polestar Secures $600 Million Loan From Geely to Stabilize Finances
The Swedish-Chinese electric car maker Polestar has secured a loan facility of up to $600 million from its majority owner, Geely, providing a critical liquidity boost as the company battles heavy losses and works to avoid delisting from the US stock exchange.
According to Polestar, $300 million is available immediately, while the second tranche will be released later, subject to further developments. The loan is being provided via Geely Sweden, a Swedish subsidiary of the Geely Group and one of Polestar’s largest shareholders.
Losses Deepen Despite Rising Revenue
Polestar’s recent financial results underline why fresh funding has become essential.
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Q3 2025 net loss: $365 million
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Year-on-year increase in losses: +13%
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Net loss (Jan–Sep 2025): $1.56 billion (+80% YoY)
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Gross margin: –34.5%
A major factor behind the deteriorating margins was a $739 million write-down on the battery-electric SUV Polestar 3, which has underperformed initial expectations.
At the same time, Polestar’s revenue rose sharply, increasing 48.8% to $2.17 billion for the first nine months of 2025. This contrast highlights the company’s core challenge: strong sales growth paired with weak cost control, particularly ahead of upcoming capital-intensive launches, such as the Polestar 5, a high-performance GT featuring a 650 kW powertrain.
Subordinated Loan: A Strategic Safety Net
A key detail of the Geely financing is that it is structured as a subordinated loan. In the event of insolvency or liquidation, Geely would be repaid only after senior creditors.
This structure can serve two purposes:
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Emergency liquidity: It allows Polestar to secure funding when traditional bank loans may no longer be available on normal market terms.
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Credit leverage: By acting as a buffer, the subordinated loan could encourage banks to extend additional credit on more favorable conditions.
Nasdaq Delisting Risk and Countermeasures
Polestar has also been under pressure from the Nasdaq, as its share price had traded below $1 for an extended period, putting it at risk of delisting.
To address this, the company executed a reverse split of its American Depositary Shares (ADS), converting 30 old shares into one new share. Following the move, Polestar’s share price rebounded to around $12, comfortably above the minimum listing threshold.
Geely Tightens Its Grip on Polestar
Geely’s latest loan builds on earlier support. In June, Geely founder Li Shufu injected $200 million into Polestar through a capital increase.
As a result:
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Li Shufu’s PSD Investment now holds 44% of Polestar
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Combined with Geely Sweden’s stake, Li Shufu controls roughly 66% of the company
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Volvo Cars, majority-owned by Geely, holds an additional 16% stake
Taken together, around 80% of Polestar is now controlled by Li Shufu’s automotive empire, underscoring Geely’s central role in the EV brand’s survival and future direction.
What This Means for Polestar
The $600 million loan does not solve Polestar’s structural challenges overnight, but it buys time. With fresh liquidity, reduced delisting risk, and strong backing from Geely, Polestar can continue restructuring costs while pushing ahead with its next-generation models.
The coming quarters will be decisive in determining whether Polestar can translate rising revenue into sustainable profitability—or remain dependent on shareholder support.