It has only been a week since Volvo sold the majority of its Polestar shares but the EV startup is soldiering on, announcing that it has just secured $950 million in external funding.
This latest round of financing is being provided by 12 international banks, including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC, and SPDB, through a three-year loan facility. This investment will provide Polestar with the necessary funds to finance the next stage of its development and will cover “a large majority of its estimated financing needs.”
Accompanying the new round of financing is a new ‘efficiency program’ launched by Polestar that will see it cut 15% of jobs this year. It hopes to break even from a cash flow perspective by 2025, have an annual volume exceeding 155,000 units, and achieve a gross margin in the high teens.
Read: Volvo’s Divorce With Polestar Is Official, Geely Picks Up The Pieces
“Securing funding from a syndicate of global banks reflects our partners’ support for Polestar’s growth course,” Polestar chief executive Thomas Ingenlath said. “Together with Geely’s full financial support and access to innovative technology and engineering expertise, we have reinforced our path towards cash flow break-even targeted in 2025. This marks a new phase in Polestar’s business. The efforts of recent years are paying off: We improved our cost basis, secured financing and are ramping up our product offensive.”
This year, Polestar will ramp up sales of the new 4 around the world. It also recently started production of the 3 SUV in China and has completed test production runs at its facility in South Carolina. It will also accelerate prototype production of the 5 this year.
“As a strategic partner and direct shareholder in Polestar, Geely will continue to provide full operational and financial support to the iconic performance car brand going forward,” Geely chief executive and Polestar board member Daniel Li added. “We will retain our shares in Polestar and intend to participate in future financing activities when required. Polestar will have full access to technologies and engineering expertise from Geely Holding to realize its global growth targets.”
