Polestar secures $450m lifeline amid cash crunch, delays quarterly results

Polestar Automotive Holding, the Swedish electric vehicle (EV) maker backed by China’s Geely, has secured a $450 million loan to navigate a cash crunch, the company announced on Friday. The additional funding comes as Polestar faces falling demand and fierce competition in the EV market. U.S.-listed shares of the company dipped 2.7% in premarket trading following the news.

The company also postponed its fourth-quarter results to April, marking yet another delay that has left investors uneasy. Polestar’s financial disclosures have been under scrutiny after multiple reporting errors and delays in recent quarters. “The new funds will be used for general corporate purposes,” a Polestar spokesperson told Reuters, without providing further details on its financial challenges.

Polestar has been burning through cash in a bid to scale up production and move closer to profitability. In December, the EV maker secured over $800 million in 12-month loans, a portion of which was allocated to repay existing debts. The latest loan is part of a broader strategy to stabilize its financial position amid a softer buying environment. Analysts warn that the company’s survival hinges on securing a steady stream of funding, a challenge that has pushed several EV startups into bankruptcy, including Nikola.

Polestar’s struggle reflects broader pressures in the EV market, where competition from industry giants like Tesla and legacy automakers has intensified. The company’s recently appointed CEO has launched a strategic review aimed at cutting costs and accelerating the path to profitability. However, with demand cooling and cash reserves under pressure, Polestar’s road ahead remains uncertain.

Read more on Polestar sees 63% stock decline, revenue dips to $2.38bn in 2023