Swedish-Chinese electric carmaker Polestar has secured a new loan of up to $450 million (€420 million) as it grapples with ongoing financial pressures and strives to turn a profit by 2026. Local Chinese media also reported that the company aims to downscale its Chinese operations and relocate production to South Korea, Europe or the US.
The struggling EV brand also renewed a $500 million (€480 million) Green Trade Finance Facility (TFF), a financial instrument designed to support its working capital requirements. The TFF, initially launched in 2022 with banking giants Citi, Nordea, and ING, aims to strengthen the company’s financial position.
Financial health
The latest cash injection comes just months after Polestar secured more than $800 million (€760 million) in short-term funding in December 2024. The new capital funding underscores the brand’s continued reliance on external financing as it implements its latest turnaround plan issued by the new boss, Michael Lohscheller.
Despite these efforts, Polestar’s financial health remains under concern. The carmaker has once again delayed the release of its full-year 2024 earnings report, pushing the announcement from March to April.
The delay has raised eyebrows among investors, with some speculating that Polestar is grappling with the need to revise past financial statements. According to sources close to the matter, errors in previous reports have necessitated corrections.
Cruising speed
Under Lohscheller, Polestar regards 2025 as a make-or-break year. The CEO has stated that he expects it to be the strongest year in the company’s history, as sales of new models are expected to reach cruising speed.
The Polestar 3 and Polestar 4, which accounted for 56% of the company’s orders in the final quarter of 2024, are key to driving this growth. Meanwhile, the flagship Polestar 5 is scheduled for release later this year, with the Polestar 7, an entry-level SUV, will follow in 2027.
Polestar’s ambitions have been met with significant challenges, particularly in China, a market that has become increasingly difficult for EV makers with strong international presence. Speculation has mounted in recent months that the company may be preparing to pull back from the Chinese market entirely, though Polestar vigorously denies these claims.
However, reports indicate that Polestar has been steadily downsizing its operations in the country. Since February, the company’s headquarters in Nanjing has been undergoing restructuring, with top executives and staff expected to leave by mid-March.
Around 50 employees in sales and operations have reportedly been laid off since the Lunar New Year, raising further doubts about the company’s long-term presence in China.
Belgium: +63%
Despite its Chinese roots, with Geely a major shareholder, the home country proves to be a particularly weak spot. The Polestar 4, the only model produced at Geely’s Hangzhou Bay factory, ceased production early 2024 due to lacklustre demand. In response, Polestar is shifting manufacturing overseas to navigate trade tariffs and shifting geopolitical pressures.
Alongside the mentioned Polestar 7, which is set to be produced at a yet-to-be-determined European Volvo plant, the Polestar 4 will begin production in South Korea from late 2025
Despite the setbacks, Polestar remains optimistic about its prospects. The company has set an ambitious target of 30% to 35% annual sales growth between 2025 and 2027, with profitability in sight by next year. Polestar has also moved away from a purely digital retail strategy to work with traditional dealerships as part of its restructuring efforts.
Latest sales figures for Belgium show an encouraging trend. In the first two months of 2025, Polestar sales grew by 63.1% to 548 units, while the overall market slipped 10.6%.
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