The funding follows a $300M equity investment from BBVA and Natixis, along with a loan deal of up to $600M from majority owner Geely Holding.
In a strategic move to solidify its financial standing, the Swedish electric performance car manufacturer Polestar (Nasdaq: PSNY) announced on Monday that it has secured a $400 million equity investment. This fresh infusion of capital comes at a critical juncture for the automaker, which is currently navigating a period of intensive growth amidst a broader global slowdown in electric vehicle (EV) demand.
The funding is being provided by two major financial institutions: Sumitomo Mitsui Banking Corporation (SMBC), via the special purpose vehicle Feathertop Funding Limited, and Standard Chartered Bank (Hong Kong) Limited. Each institution has committed $200 million to the deal, underscoring continued institutional confidence in Polestar’s long-term roadmap despite recent market volatility.
Strategic Financial Structuring
The transaction is meticulously structured to balance immediate liquidity needs with investor security. Under the terms of the agreement, both banks have entered into put option arrangements with a wholly-owned subsidiary of Geely Sweden Holdings AB. This mechanism provides the investors with a clear exit strategy in three years, offering guaranteed returns should they choose to exercise the option.
Polestar CEO Michael Lohscheller emphasized the importance of this deal in the context of the company’s broader stabilization efforts. “Following the new equity financing and the funding announcements in December, and with the support of Geely Holding, we continue to make progress on enhancing our liquidity position and strengthening our balance sheet,” Lohscheller stated. He added that the company is now “fully focused on creating a stronger Polestar” following a record year of retail sales in 2025.
Pricing and Ownership
The shares are priced at $19.34 per Class A ADS, a figure that aligns with the pricing of Polestar’s previous equity raise in December 2025. This consistency reflects a stabilized valuation following the company’s recent reverse stock split, which was implemented to maintain its listing on the Nasdaq.
Importantly, the deal is designed to prevent significant dilution of control; upon closing, neither SMBC nor Standard Chartered will hold more than 10% of Polestar’s outstanding equity. The transaction is expected to be finalized by February 5, 2026, as no regulatory approvals are required. BofA Securities served as the exclusive financial advisor for the deal.
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Operational Resilience and Global Expansion
This $400 million “lifeline” arrives just as Polestar scales its operations to combat high import tariffs and rising production costs. The company is currently diversifying its manufacturing footprint, with the Polestar 4 set to be produced in South Korea for the North American market and production of the upcoming Polestar 7 planned for Europe.
While the company has faced a “cash crunch” and significant net losses over the past year reporting a net loss of $1.56 billion for the first nine months of 2025 there are clear signs of momentum. In the final quarter of 2025, Polestar saw a 27% jump in sales, delivering over 15,600 vehicles. Europe remains the brand’s primary stronghold, accounting for nearly 78% of its total global sales.
The Road Ahead
Polestar’s strategy is also shifting toward a more traditional retail model. The company has recently expanded its sales network by 50% outside of China, moving away from a purely direct-to-consumer online model to involve physical car dealers.With the support of its majority owner, Geely, Polestar is moving forward with an ambitious product lineup including the Polestar 3, 5, and 6. The company is scheduled to provide a more detailed update on its financial health and product development during its upcoming earnings call on February 18. For now, this $400 million investment provides the necessary runway for Polestar to continue its pursuit of becoming a climate-neutral leader in the luxury EV segment by 2040.
