Polestar has ambitious plans for the coming years and to help achieve them, has just received a $1.6 billion boost in capital.
While recently speaking with analysts during the automaker’s latest quarterly earnings call, chief executive Thomas Ingenlath revealed that Volvo will provide the EV maker with an 18-month $800 million loan while major shareholder PSD Investment Ltd. is also committing $800 million through direct and indirect financing and liquidity support.
According to Ingenlath, this financing “allows Polestar to focus on delivering more cars to more customers.” Polestar chief financial officer Johan Malmqvist added that the funding “allows us time to unlock a broader range of longer-term financing alternatives when conditions in the capital markets improve.”
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Polestar says it is on track to deliver 50,000 vehicles by the end of 2022, having handed over the keys to 30,400 vehicles in the first nine months of the year. While 2022 has seen strong growth for the company, it expects to grow more rapidly over the coming two years with the launch of the Polestar 3 in 2023 and the Polestar 4 in 2024.
The automaker expects to sell 24,000 units of the 3 in 2023, 67,000 in 2024, and 77,000 in 2025. Meanwhile, it believes it can sell 43,000 examples of the cheaper 4 in 2024 and 79,000 in 2025 alone. Polestar hopes to be selling some 290,000 vehicles by the middle of the decade.
“With the three product launches we have over the next three years, we are focused on delivering on those milestones and for those products to then start generating revenues,” added Malmqvist, noting the new funding will help “safeguard the car programs.”
Canaccord Genuity managing director George Gianarikas told Auto News that Polestar’s wealthy shareholders could prove increasingly important due to the uncertainty around economic markets.
“It’s not always the company with the best business plan or product that wins, but the one with the best balance sheet,” Gianarikas said. “Companies that raise money at the right time survive well past their sell-by date just because they have a lot of money in the bank.”
While Polestar has yet to turn a profit, it posted a third-quarter operating loss of $196.4 million compared with $292.9 million a year ago while sales rose from $212.9 million to $435.4 million over the same time period.