Last Wednesday, Polestar announced that it had received $950 million in external financing for a three-year loan, jointly provided by more than a dozen banks including BNP Paribas, BNP Paribas, Standard Chartered Bank, and HSBC. Jixing Motors stated that this capital injection will provide funding for its ambitious product launch and meet the vast majority of financing needs.
"New investments are crucial for Polestar to get back on track," said Carl Brauer, executive analyst at isecars.com. "However, considering the changing sales momentum of electric vehicles and the increasingly fierce competition in the electric vehicle market, Polestar's long-term financial stability may be challenging."
Volvo announced a reduction in its stake in Polestar and stopped future financing for less than a month, with the latter raising new funds. According to foreign media reports, last Wednesday, Jixing Automobile announced that it had received $950 million in external financing, which is a three-year loan provided by more than a dozen banks including BNP Paribas, Banque de France, Standard Chartered Bank, and HSBC.
Jixing Motors stated that this capital injection will provide funding for its ambitious product launch and meet the vast majority of financing needs. According to the plan, Polar Star's gross profit margin will reach double digits by the end of this year.
"This marks a new stage for Polestar's business," said Thomas Ingenlath, CEO of Polestar Motors. "In recent years, our efforts have been paying off, including improving our cost base, obtaining financing, and increasing our product offensive."
However, as the market demand for pure electric vehicles slows down, the situation for related car brands becomes increasingly difficult; Tesla launched a "price war" to seize market share and further intensify market competition.
"New investments are crucial for Polestar to get back on track," said Karl Brauer, executive analyst at isecars.com. "However, considering the changing sales momentum of electric vehicles and the increasingly fierce competition in the electric vehicle market, Polestar's long-term financial stability may be challenging."
Previously, Volvo stated that it would reduce its stake in Polestar from 48% to 18% due to failure to achieve its 2023 delivery target. Polar Star stated in early February that it still needs $1.3 billion in funding before achieving a balance of income and expenditure in 2025.
After Volvo reduced its stake in Polestar, Geely Automobile announced that it will continue to fully support Polestar's future development in operations and finance, expanding synergies in basic technology, supply chain, manufacturing, and other areas. "Geely's comprehensive financial support and synergies will help Polestar achieve its' 2025 balance of payments' goal," said Ingalls.
Geely Automobile hopes to connect with the US market, so it will invest a lot of effort in Polestar. Brauer said, "I don't think Geely will let the Star brand fail, because many Chinese brands hope to occupy a beachhead in the US market."
According to the plan, Polestar 3 and Polestar 4 will be launched in the United States this year, with the two models being launched in the second and fourth quarters respectively. "The new product targets one of the fastest-growing sub markets in the industry, enhancing our brand image while driving strong sales and profit growth in the second half of the year," said Ingalls. (Translated by Jiang Zhiwen from China Economic Net)