Dive Brief:
- Electric vehicle maker Polestar secured a $200 million equity investment from existing investor PSD Investment, the company announced in a June 16 press release.
- As part of the deal, Polestar has agreed to sell 190,476,190 newly issued Class A American Depository Shares to PSD Investment through a private investment in public equity for $1.05 each. PSD Investment is controlled by Li Shufu, founder and chairman of Polestar’s majority owner, Geely Holding Group.
- In addition, in order to retain the voting power of its shares below 50%, PSD Investment will also convert 20 million shares to a different classification, according to the release.
Dive Insight:
A private investment in public equity, known to investors as a PIPE, allows publicly traded companies to raise capital by selling stock directly to private investors, rather than on the open market, according to Bloomberg Law. PIPEs offer a more streamlined way for companies to secure funding, since they have a less stringent regulatory process from the Securities and Exchange Commission.
Polestar intends to use the proceeds for working capital requirements and general corporate purposes as it works to grow its global EV sales.
Like other automakers competing in the fledgling EV market, Gothenburg, Sweden-based Polestar has struggled to boost sales and reach profitability. Polestar delivered 44,851 EVs in 2024, but posted a $2 billion loss. The publicly-traded company’s losses have also severely impacted its fortune on the market.
Last July, Polestar received a notice of noncompliance for not meeting the Nasdaq’s $1 minimum bid price requirement. But Polestar’s stock bounced back to over $1 in September 2024, allowing it to remain on the Nasdaq.
In a June 2 letter to shareholders announcing the company’s fiscal year 2024 performance, Polestar CEO Michael Lohscheller wrote that the company had made “significant investments” in establishing the brand and operations across 27 global markets. Lohscheller said the investments have laid the foundation for the company’s continuing growth and he expects that 2025 will be its best in terms of volumes and financial performance.
In Q1 2025, Polestar reported a 76% year over year increase in EV sales of more than 12,300 vehicles. The company’s net revenue also increased by $278 million in the quarter, representing a 84.2% year over year improvement. Polestar cited higher sales volumes and favorable shift in its product mix for the gains. However, Polestar and other automakers are now working to lessen the impact of tariffs.
Last summer, the company began production of the Polestar 3 SUV at the Volvo Cars plant in Ridgeville, South Carolina. It was the first Polestar EV produced in the U.S.
Polestar also announced this month its market expansion in France as it works to expand its global EV footprint. Customers can now order the Polestar 2, Polestar 3 and Polestar 4 in the country for the first time.
Globally, Polestar plans to have a line-up of five performance EVs on the market by 2026.
