9:26 am, February 29, 2024
Polestar’s $950m (£750m) funding from a syndicate of world banks will allow the brand to ‘be on an even footing alongside Volvo’ in Geely’s empire, its UK boss has said.
The Swedish electric performance announced it had secured an investment of nearly a billion US dollars yesterday (Feb 28), after Volvo said earlier it was planning to divest 30% of its 48% shareholding in Polestar to its shareholders.
The three-year loan facility, worth $950m (£750m), comes from 12 international banks including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB.
In announcing the funding, Polestar said the loan ‘covers a large majority of its estimated financing needs’.
The funding comes as Polestar is deep in making cost efficiencies which include job cuts – the brand has already cut 10% of jobs since mid-2023 with a further 15% to follow this year – and as it races towards its target of breaking even in cash flow terms, exceeding 155,000 annual volume and achieving a gross margin in the high teens.
Daniel Li, Geely Holding Group CEO and Polestar board member, said: ‘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.
‘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 realise its global growth targets.’
Volvo and Polestar relationship has been misrepresented
Speaking exclusively to Car Dealer on the day of the announcement, head of Polestar UK & Ireland Jonathan Goodman, said: ‘This puts us on an even footing with the likes of Volvo, Lynk & Co, Zeekr and Lotus as a standalone, independent brand under the Geely umbrella.
‘This is the logical next step for Polestar as Volvo helped us get up and running faster than we ever would have been able to do ourselves.’
Referencing earlier media reports of Volvo having cold feet over Polestar and walking away from its shareholding, Goodman said: ‘This has been misrepresented. Volvo is not pulling out. It will still have an 18% share in Polestar.
‘Volvo will still be a strategic shareholder in terms of development, and from our customers’ perspective in the UK and Europe nothing changes as they will still have access to Volvo dealers for servicing.’
He added: ‘Polestars 1, 2 and 3 are on Volvo platforms – they’ve not helped us out of charity as we’ve paid them an awful lot of money in R&D, which everyone seems to ignore. With those cars on Volvo platforms and Polestars 4, 5 and 6 on Polestar platforms built in-collaboration with Geely, I think this kind of a natural pause.
‘We are getting closer and closer to Geely from a technological point of view, and it’s the ideal time for Geely to step forward and for Volvo to concentrate on its own business.’
From a UK perspective, 2024 will see the arrival of the Polestar 3 and 4 SUVs, a new Polestar Space will open in Glasgow next month, and at least two more Spaces are due to open during the year.
‘We have quite a few dealers knocking on our door asking if they have a bit of Polestar, but we’re saying we are going to grow gradually and organically in the areas where’s there’s real demand for Polestar,’ Goodman added.
