Polestar Automotive announces ‘strengthened’ business plan

Polestar Automotive Holding UK presents a strengthened business plan which targets an accelerated margin improvement and a reduction of the Company’s total funding need to the point of cash flow break-even in 2025. In light of a fast-changing operating environment, Polestar has introduced a strengthened business plan that reorients a path to profitability by prioritising margin progression over volume. For the fiscal year 2025, Polestar is targeting a gross margin in the high teens with a total annual volume of approximately 155,000-165,000 cars. This is expected to be achieved through a richer product mix, with four models in production, reduced cost structure and refocused approach to key markets including a new joint venture in China and measures to improve profitability in the US business. Polestar has already implemented cost reduction measures announced earlier this year around headcount reductions and continues to advance active cost management efforts. Showing their continued commitment to Polestar, Geely Holding and Volvo Cars have provided additional liquidity to the Company. Pursuant to an amendment to its existing shareholder term loan, Volvo Cars has extended the maturity of its outstanding term loan by over three years to June 2027, and provided an aggregate of $200 million in additional loan capacity with the same maturity date, bringing the total investment to $1 billion. In addition, Geely Sweden Automotive Investment AB is making available a $250 million term loan on substantially the same terms as Volvo Cars, including the maturity in June 2027. Both loans have an optional equity conversion feature. Based on the reduced funding need from a strengthened business plan and new and existing financing and liquidity support from Geely Holding and Volvo Cars, Polestar expects it will require external funding of approximately $1.3 billion until achieving cash flow break-even, targeted in 2025. Working alongside its major shareholders, Polestar is well-progressed on a holistic financing plan to provide the remainder of funding required, including additional debt and equity.