EV Brand Polestar Announces $1.6 Billion in New Financing as its Stock Price Falls Below $5
Electric performance vehicle brand Polestar, which is jointly operated by Sweden's Volvo Cars and its parent company Chinese automaker Geely, announced its secured $1.6 Billion in financing from two major shareholders.
Polestar's parent company Volvo Cars is providing $800 million as part of an 18-month term loan, with an equity conversion option for Volvo Cars. This loan amount is equal to the direct and indirect financing from Polestar's other major shareholder, PSD Investment, Polestar announced in a press release.
In June, Polestar closed on its previously announced business combination with Gores Guggenheim, a special purpose acquisition company ("SPAC") formed by affiliates of The Gores Group and Guggenheim Capital, LLC. The automaker's shares began trading on the Nasdaq under the new ticker symbol "PSNY" on June 24, 2022.
However, Polestar's stock has lost over half its value since its shares began trading on the NASDAQ this summer. The company's stock price on Thursday was $4.28 after rising 5% on the announcement of the new financing. The automaker's current market cap is $9.28 billion.
Despite a plunging stock price, Polestar said in September that it still expects to deliver on its full-year target of 50,000 cars. Vehicle deliveries will be weighted towards the fourth quarter, following disruptions from COVID-19 shutdowns in China.
Polestar says it still has enough cash on hand to fund its operations through 2023.
"We welcome the continued support from our major shareholders at a time when the capital markets are volatile and unpredictable. With sufficient funds through 2023, we remain laser focused on business execution. We have around 70,000 cars on the road today, and are on track to reach our goal of delivering 50,000 cars to customers in 2022. We are making strong progress on our ambitious plans to launch three more cars by 2026," said Polestar CEO, Thomas Ingenlath.
In early September, Polestar reported $1 billion in revenue for the first half of 2022. In the first four months of 2022, customer reservations also more than tripled to nearly 23,000 vehicles compared to the same period in 2021. Polestar delivered 21,185 vehicles in the first six months of 2022, compared to just 9,510 for the same period in 2021.
Polestar also began delivering it first mass market EV, the Polestar 2, to rental car company Hertz in June as part of a major purchase agreement for 65,000 electric cars.
The Polestar 2 was the company's first mass market EV.
Polestar expects to post its third quarter results for the period ended Sept 30, 2022 on Friday, Nov 11, 2022.
Polestar is moving along with plans to introduce new models. The company will introduce two new electric SUVs by 2024. The first will be the recently unveiled Polestar 3. Production is slated for early 2023.
The Polestar 3 will be built at Volvo's factory in Ridgeville, South Carolina. The electric SUV will be a strong competitor to Tesla's Model Y, Audi e tron, and Ford's Mustang Mach-E in the premium electric segment.
The Polestar 3 will also feature connectivity features based on Google's Android Automotive OS, as well as high-end, safety-focused autonomous driving features, the company said. It will offer autonomous highway driving powered by a centralized NVIDIA DRIVE processor with integrated LiDAR from Polestar's technology partner Luminar. It will be one of the world's first EV's equipped with lidar during production to support autonomous driving functions.
The Polestar 3 will also be a software-based vehicle capable of receiving regular over-the-air software updates, which was pioneered by Tesla.
In August, Polestar confirmed plans to put its electric roadster concept into production. The production version of the battery-powered sportscar car is expected to launch in 2026 as the "Polestar 6".
The concept EV was first unveiled in Los Angeles in March as the Polestar O2 and was intended to showcase Polestar's vision for future sports cars. At the time, Polestar said that the O2 hard-top convertible "redefines sports roadsters for the electric age."
Polestar is headquartered in Gothenburg, Sweden, and its vehicles are sold in markets across Europe, North America, China and Asia Pacific. Polestar cars are currently manufactured in China, with additional manufacturing planned at Volvo's factory in Ridgeville, South Carolina.
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