Geely-backed Polestar Automotive Holding UK PLC, the Swedish electric performance car brand, has on Wednesday announced that it has secured $950 million in external funding.

Polestar said in a statement that the financing is being provided by 12 leading international banks including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB, in the form of a three-year loan facility.

It provides Polestar with the funds it requires to finance the next stage of its development and covers a large majority of its estimated financing needs.

The firm’s cash on the balance sheet as at December 31, 2023 was approximately $770 million.

The company said it is making strong progress on its strengthened business plan and achieving its 2025 targets.

“Securing funding from a syndicate of global banks reflects our partners’ support for Polestar’s growth course,

“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,” said Thomas Ingenlath, Polestar Chief Executive Officer.

Daniel Li, Geely Holding Group Chief Executive Officer and Polestar Board Member, said that 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 realize its global growth targets,” he added.

According to the statement, the financing that has now been agreed will be accompanied by a comprehensive efficiency program from Polestar.

Among other measures, 10 percent of jobs have been cut since mid-2023, with a further 15 percent to follow this year.

Polestar has thus made significant progress on its strengthened business plan and 2025 targets: achieving cash flow break-even, annual volume of over 155,000 and a gross margin in the high teens.

At the same time, Polestar was able to expand its model range with two high-margin sports utility vehicles (SUVs).

The Polestar 4 sales are accelerating around the world, while Polestar 3 has now started production in China and has also successfully completed test production runs in South Carolina, United States.

Prototype production of Polestar 5, a progressive performance GT, will also accelerate in 2024.

Finally, in addition to the secured $950 million in external funding, the recently announced new shareholder structure in Polestar also provides a solid basis for the brand’s further business development.

Under the new structure, Geely Sweden Holdings will become the second largest shareholder and Volvo Cars intends to retain an 18 percent stake.

“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,

“Both SUVs now sharpen the brand, target one of the fastest growing segments in the industry and position us for strong volume growth and profit margin progression from the second half of 2024,” said Ingenlath.

According to the statement, at the end of this year, Polestar expects volume growth that supports the 2025 volume target and a double-digit gross profit margin.

Volume and margin progression are expected to be weighted towards the second half of 2024, as the two SUVs reach full production and global distribution.

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