Polestar secures USD 1 billion external funding; business outlook confirmed

  • USD 950 million external funding secured
  • Geely Sweden Holdings intends to participate in future financing activities when required
  • Richer product mix: global roll-out of two new SUVs to drive significant volume and profit margin progression expected in second half of the year
  • Efficiency program delivers results

 

GOTHENBURG, SWEDEN – 28 February 2024. Polestar Automotive Holding UK PLC (Nasdaq: PSNY), the Swedish electric performance car brand, announces that it has secured USD 950 million in external funding. The company is making strong progress on its strengthened business plan and achieving its 2025 targets.

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. Cash on the balance sheet as at 31 December 2023 was approximately USD 770 million.

Thomas Ingenlath, Polestar CEO, says: “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.”

Daniel Li, Geely Holding Group CEO and Polestar Board Member, says: “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 realise its global growth targets.”

 

Delivering on our strengthened business plan

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 SUVs. The Polestar 4 sales are accelerating around the world, Polestar 3 has now started production in China and has also successfully completed test production runs in South Carolina, USA. Prototype production of Polestar 5, a progressive performance GT, will also accelerate in 2024.

Finally, in addition to the secured USD 950 million in external funding, the recently announced new shareholder structure in Polestar 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% stake.

“This marks a new phase in Polestar’s business,” says Thomas Ingenlath. “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,” he adds.

 

Outlook

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.

 

Publication of full-year 2023 results and conference call

Polestar is adjusting the release date for the preliminary unaudited financial and operational results for the full year 2023 to a later date. This will allow the Company time to complete the first year of compliance required by the Sarbanes-Oxley Act of 2002.

Polestar management will hold a live audio webcast tomorrow, February 29, 2024 at 08:00 ET (14:00 CET) to discuss the Company’s business and outlook update. The live webcast will be available at https://edge.media-server.com/mmc/p/6p89czud/.

 

Following the completion of the call, a replay will be available shortly at https://investors.polestar.com.

 

Ends.

 

Notes to editors

Polestar’s three-year loan facility involves 12 banks, with BNP Paribas, Natixis and Standard Chartered leading the transaction and BBVA, HSBC, and SPDB acting as Mandated Lead Arrangers and Bookrunners.

 

Statement Regarding Preliminary Unaudited Financial and Operational Results

The unaudited financial and operational information published in this press release is preliminary and subject to potential adjustments. Potential adjustments to operational and consolidated financial information may be identified from work performed during Polestar’s year-end audit. This could result in differences from the unaudited operational and financial information published herein. For the avoidance of doubt, the preliminary unaudited operational and financial information published in this press release should not be considered a substitute for the financial information to be filed with the SEC in Polestar’s Annual Report on Form 20-F for the year ended December 31, 2023.

Evi Boits

Communications Manager, oona agency

 

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À propos de Polestar

Polestar (Nasdaq : PSNY) est la marque suédoise de voitures électriques performantes qui met l'accent sur le design et l'innovation sans compromis, avec l'ambition d'accélérer le changement vers un avenir durable. Basée à Göteborg, en Suède, ses voitures sont disponibles sur 27 marchés en Amérique du Nord, en Europe et en Asie-Pacifique.

Polestar compte trois modèles dans sa gamme : la Polestar 2, la Polestar 3 et la Polestar 4. Les modèles prévus comprennent la Polestar 5 GT à quatre portes (qui sera introduite en 2025), le roadster Polestar 6 et le SUV compact, la Polestar 7. Ses véhicules sont actuellement fabriqués sur deux continents, l'Amérique du Nord et l'Asie, mais Polestar prévoit de diversifier davantage son empreinte industrielle, avec la production de la Polestar 7 prévue en Europe.

Polestar a un engagement inébranlable en matière de développement durable et a établi une roadmap ambitieuse pour atteindre ses objectifs climatiques : réduire de moitié les émissions de gaz à effet de serre d'ici 2030 par véhicule vendu et devenir climatiquement neutre sur l'ensemble de sa chaîne de valeur d'ici 2040. La stratégie globale de Polestar en matière de développement durable couvre les quatre domaines suivants : le climat, la transparence, la circularité et l'inclusion.  

Forward-Looking Statements

Certain statements in this press release (“Press Release”) may be considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or the future financial or operating performance of Polestar including the number of vehicle deliveries and gross margin. For example, projections of revenue, volumes, margins, cash flow break-even and other financial or operating metrics and statements regarding expectations of future needs for funding and plans related thereto are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “forecast”, “plan”, “seek”, “future”, “propose” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. 

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Polestar and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: ( (1) Polestar’s ability to enter into or maintain agreements or partnerships with its strategic partners, including Volvo Cars, Geely and Xingji Mezu Group, original equipment manufacturers, vendors and technology providers; (2) Polestar’s ability to maintain relationships with its existing suppliers, source new suppliers for its critical components and enter into longer term supply contracts and complete building out its supply chain; (3) Polestar’s ability to raise additional funding; (4) Polestar’s ability to successfully execute cost-cutting activities and strategic efficiency initiatives; (5) Polestar’s estimates of expenses, profitability, gross margin, cash flow, and cash reserves; (6) the identification and remediation of accounting errors and/or a final assessment of errors already identified that differs significantly from Polestar’s preliminary view of such errors and the successful filing of restatements of any SEC reports; (7) Polestar’s ability to continue to meet stock exchange listing standards; (8) changes in domestic and foreign business, market, financial, political and legal conditions; (9) demand for Polestar’s vehicles or car sale volumes, revenue and margin development based on pricing, variant and market mix, cost reduction efficiencies, logistics and growing aftersales; (10) delays in the expected timelines for the development, design, manufacture, launch and financing of Polestar’s vehicles and Polestar’s reliance on a limited number of vehicle models to generate revenues; (11) increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion cells or semiconductors; (12) risks related to product recalls, regulatory fines and/or an unexpectedly high volume of warranty claims; (13) Polestar’s reliance on its partners to manufacture vehicles at a high volume, some of which have limited experience in producing electric vehicles, and on the allocation of sufficient production capacity to Polestar by its partners in order for Polestar to be able to increase its vehicle production volumes; (14) the ability of Polestar to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employes; (15) risks related to future market adoption of Polestar’s offerings; (16) risks related to Polestar’s current distribution model and the evolution of its distribution model in the future; (17) the effects of competition and the high barriers to entry in the automotive industry and the pace and depth of electric vehicle adoption generally on Polestar’s future business; (18) changes in regulatory requirements (including environmental laws and regulations and regulations related to connected vehicles), governmental incentives, tariffs and fuel and energy prices; (19) Polestar’s reliance on the development of vehicle charging networks to provide charging solutions for its vehicles and its strategic partners for servicing its vehicles and their integrated software; (20) Polestar’s ability to establish its brand and capture additional market share, and the risks associated with negative press or reputational harm, including from electric vehicle fires; (21) the outcome of any potential litigation, including litigation involving Polestar and Gores Guggenheim, Inc., government and regulatory proceedings, tax audits, investigations and inquiries; (22) Polestar’s ability to continuously and rapidly innovate, develop and market new products; (23) the impact of the ongoing conflict between Ukraine and Russia and in Israel, the Gaza Strip and the Red Sea; and (24) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in Polestar’s Form 20-F, and other documents filed, or to be filed, with the SEC by Polestar. There may be additional risks that Polestar presently does not know or that Polestar currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. 

Nothing in this Press Release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Polestar assumes no obligation to update these forward-looking statements, even if new information becomes available in the future, except as may be required by law.