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The Chinese-owned Swedish electric car brand has been facing financial difficulties of late, and it’s not clear whether a billion dollars in funding is enough to keep it in the black.
Polestar has secured $US950 million ($AU1.46 billion) in external funding, as the electric car company begins to forge its own path – but even by its own admission, it may not be enough.
Both Polestar and Volvo are owned by Chinese automotive giant Geely, though this financing round was externally raised through 12 international banks as a three-year loan.
In early February 2024 – when the announcement was made that the two Swedish brands were cutting financial ties – Polestar admitted it required approximately $US1.3 billion ($AU2 billion) in external funds to secure its future, with the latest funding falling short.
The company recently announced it would need to lay off 15 per cent of its global workforce – following a 10 per cent cut in mid-2023 – with the company reporting an operating loss of $US735 million ($AU1.1 billion) for the first three quarters of 2023.
Despite this, Polestar’s CEO Thomas Ingenlath remains positive.
“This marks a new phase in Polestar’s business,” Mr Ingenlath said in a written statement.
“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.”
While Polestar’s new model roll-out has been delayed due to software problems, Volvo says it will maintain an 18 per cent stake in the brand and continue collaborating across research and development, manufacturing, and aftersales.
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