Polestar, the Swedish electric car maker, has announced that it has secured a $1 billion loan from a group of 12 international banks, including BNP Paribas, Natixis, Standard Chartered, BBVA, HSBC and SPDB. The loan, which has a three-year term, will provide Polestar with the funds it needs to finance the next stage of its development and growth.
Polestar, which is a subsidiary of Geely Holding Group, the Chinese owner of Volvo, said that the loan covers a large majority of its estimated financing needs. The company had about $770 million in cash on its balance sheet as of December 31, 2023. Polestar also said that Geely will continue to provide full operational and financial support to the brand, and that it intends to participate in future financing activities when required.
Thomas Ingenlath, Polestar CEO, said: “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.”
The Company Delays Its Annual Earnings Report Due to Compliance Issues
However, while the company emphasized the financial and operational improvements it made in 2023, it has also elected to delay the release of its annual earnings report, a decision it says will allow more time to meet compliance standards required under the U.S.’s Sarbanes-Oxley Act of 2002. The act, which was enacted after the Enron scandal, aims to protect investors from fraudulent accounting practices by corporations.
Polestar, which went public in October 2023 through a merger with a special purpose acquisition company (SPAC) called Gores Guggenheim, said that it expects to file its annual report on Form 20-F with the U.S. Securities and Exchange Commission (SEC) by March 31, 2024. The company said that the delay does not affect its business operations or financial performance, and that it remains confident in its outlook for 2024 and beyond.
Polestar also said that it will provide an update on its 2023 results and 2024 guidance in a webcast on March 1, 2024. The company said that it expects to achieve cash flow break-even by 2025, and to sell over 155,000 vehicles annually by then. The company also said that it expects to improve its gross margin to the high teens, thanks to a richer product mix and a comprehensive efficiency program.
The Company Expands Its Model Range with Two New SUVs
Polestar, which was founded in 2017 as a spin-off from Volvo, has been expanding its model range with two new SUVs, the Polestar 3 and the Polestar 4. The Polestar 3, which is a compact electric SUV, has started production in China and has also successfully completed test production runs in South Carolina, USA. The Polestar 4, which is a midsize electric SUV, has been selling well around the world, especially in Europe and North America.
The company is also working on a new model, the Polestar 5, which is a progressive performance GT. The company said that it will accelerate the prototype production of the Polestar 5 in 2024, and that it will unveil the production design of the car later this year. The company said that the Polestar 5 will be a collaboration between Polestar and SpaceX, the aerospace company owned by Elon Musk, and that it will feature some rocket technology.
Polestar, which competes with other electric car makers such as Tesla, Lucid, and Rivian, said that it aims to become the leader in the electric performance car segment, and to set new standards for performance, design, and innovation. The company said that it also aims to become carbon neutral by 2050, and to use clean and renewable energy for its vehicles and operations.