Polestar Automotive has secured $400 million in equity funding from Sumitomo Mitsui Banking Corporation and Standard Chartered Bank, providing critical liquidity amid ongoing losses and high debt. This investment, structured through a special purpose vehicle at $19.34 per Class A ADS, closes by February 5, 2026, and signals confidence in Polestar’s strategy despite market challenges. EV buyers and investors should note how this bolsters Polestar’s shift to dealer sales and production relocations for better competitiveness.
Background: Polestar’s Turbulent Path in the EV Market
Polestar, a Swedish EV maker majority-owned by China’s Geely Automobile Holdings, spun off from Volvo in 2017 to focus on premium electric vehicles. It went public via a SPAC merger in 2022, listing on Nasdaq as PSNY, but has faced headwinds, including supply chain disruptions, intense competition, and softening EV demand. In 2025, Polestar reported full-year sales of 60,119 vehicles, a record but down from prior growth expectations, with 78% in Europe amid struggles in the US and China.
To maintain Nasdaq compliance, Polestar executed a reverse stock split in late 2025, lifting its share price from under $1 to around $18. High debt and operating losses persist, prompting multiple financings: $300 million from BBVA and Natixis in December 2025, now followed by this $400 million deal. Geely’s ongoing support via technology sharing and supply chains remains pivotal, enabling launches like the Polestar 5 grand tourer and Polestar 6 roadster.
Key Specifications: Funding and Core Models
| Aspect | Details |
|---|---|
| Investment Amount | $400 million USD (each bank: $200 million) |
| Investors | Sumitomo Mitsui Banking Corp., Standard Chartered Bank (Hong Kong) via Feathertop Funding Ltd. |
| Share Price | $19.34 per Class A ADS (20,682,522 shares issued) |
| Closing Date | February 5, 2026 (no regulatory approvals needed) |
| Equity Ownership | Neither exceeds 10% post-deal |
| Exit Mechanism | 3-year put option guaranteed by Geely Sweden Holdings subsidiary |
| Polestar 3 SUV | 517 hp, 563 km range, ~4.9 m long |
| Polestar 4 SUV Coupe | 100 kWh battery, 483 km range (WLTP), 4.84 m long, 2.14 m wide |
Data compiled from announcements; ranges WLTP unless noted.
Analysis: Strategic Shifts Driving Recovery
Financial Stabilization Through Dilutive but Necessary Funding. This PIPE deal enhances liquidity without an immediate debt burden, though it dilutes existing shareholders. CEO Michael Lohscheller stated: “We continue to make progress on enhancing our liquidity position and strengthening our balance sheet.” The put options provide banks an exit in three years with returns, backed by Geely, mirroring December’s terms. Stock rose 4.1% premarket to $15.51 on the announcement, reflecting market relief.
Polestar’s 2025 Q4 sales surged 27% to 15,608 units, fueling optimism ahead of February 18 financial updates. Yet profitability remains elusive; details not yet confirmed on exact cash burn or path to breakeven.
Sales and Distribution Overhaul
Shifting from direct online sales, Polestar expanded its non-China dealer network 50% and closed all 30 China stores to prioritize partnerships. Europe, now 78% of sales, is the focus, with CEO Lohscheller calling it the “strongest market.” This hybrid model aims to boost volumes amid US/China competition.
Production Localization to Dodge Tariffs
To counter US import duties, Polestar relocates: Polestar 4 production starts in Busan, South Korea, for North America (100 kWh pack, up to 483 km range). European output ramps up, leveraging Geely platforms for cost efficiency. This supports scaling models like the powerful Polestar 3 (517 hp, 563 km range).
Comparison: Polestar vs. Key Rivals
| Metric | Polestar (2025 Sales) | Tesla | Rivian | Lucid |
|---|---|---|---|---|
| Annual Volume | 60,119 units | ~1.8M (global) | 51,579 | ~10,000 |
| 2025 Growth | Record year | Declined YoY | +118% | Flat |
| Key Market | Europe (78%) | US/China | US | US |
| Recent Funding | $400M equity | Profitable | $1B+ debt | Govt loans |
| Profitability | Losses | Profitable | Losses | Losses |
Polestar trails Tesla’s scale but matches Rivian/Lucid in premium positioning; funding edge over cash-strapped peers.[External knowledge for rivals]
Verdict: Lifeline for Ambitious Growth
This $400 million infusion positions Polestar to execute its dealer pivot, localize production, and launch Polestar 5/6, targeting premium EV buyers in Europe seeking Volvo-like quality with Geely tech. It’s for investors betting on Geely’s backing and sales momentum, but risks persist: ongoing losses, dilution, and unproven profitability. Watch February 18 updates for breakeven timelines—success hinges on volume ramps and cost controls.
