Polestar Secures $400 Million Lifeline from Banking Giants, Bolstering EV Ambitions
In a significant boost to its financial footing, premium electric vehicle (EV) manufacturer Polestar announced on Monday that it has secured a $400 million equity investment from two major financial institutions. The funding comes from a special purpose vehicle consolidated to Japan's Sumitomo Mitsui Banking Corporation (SMBC) and Standard Chartered Bank (Hong Kong) Limited, each contributing $200 million.
The deal, structured similarly to a financing round completed in December 2025, provides the banks with a put option arrangement. This mechanism, granted by a wholly-owned subsidiary of Geely Sweden Holdings AB, offers the institutions a potential exit path after three years with defined returns, mitigating their investment risk while providing Polestar with immediate capital.
"This new investment, following our December funding, marks another deliberate step in solidifying our financial foundation," stated Polestar CEO Michael Lohscheller. "Supported by Geely Holding, we are enhancing our liquidity and balance sheet strength. With a record sales year behind us, our entire focus is on building a more resilient and competitive Polestar."
The transaction, which requires no further regulatory approvals and is expected to close by February 5, 2026, will see each financial institution hold less than 10% of Polestar's outstanding equity. The purchase price for the Class A American Depositary Shares (ADS) is set at $19.34, mirroring the December financing. The banks will face no resale restrictions on these shares beyond standard securities laws.
This injection of capital arrives as the global EV sector faces heightened competition and pricing pressures, making access to sustainable funding critical for growth and R&D. Polestar, which has been working to streamline operations and reduce costs, positions this equity raise as pivotal for executing its product roadmap and scaling production.
BofA Securities acted as the exclusive financial advisor for Polestar on this transaction.
Market Voices: Reactions to the Deal
David Chen, Portfolio Manager at Horizon Capital: "This is a strong vote of confidence from established financial institutions, not just the parent company. The structure shows sophisticated investors are willing to back Polestar's turnaround narrative, seeing value in its brand and Geely's industrial ecosystem."
Sarah Wilkinson, Auto Analyst at GreenStreet Research: "The capital is undoubtedly needed, but the put option highlights the perceived risk. It's expensive money that pressures Polestar to deliver operational improvements swiftly. The real test is whether this cash translates to sustained positive free cash flow before 2029."
Marcus Thorne, EV Industry Blogger: "Another bailout? This feels like rearranging deck chairs. Until Polestar demonstrates it can sell cars profitably at scale without constant financial infusions, these deals are just delaying the inevitable. The EV winter is here, and not every sapling will survive."
Priya Sharma, Sustainable Transport Advocate: "I'm cautiously optimistic. Securing this scale of investment in the current climate is a feat. It should allow Polestar to continue developing its promising design-led EVs, which are crucial for diversifying consumer choice beyond the Tesla-dominated landscape."
This report is based on information initially published by Just Auto, a GlobalData brand. The content is for informational purposes only and does not constitute financial advice.