Polestar's emergency tuneup
Polestar will quickly need every dime of the $1.6 billion it just raised from its two major shareholders as the EV manufacturer plans a major expansion at a time when its stock is trading below $1.
Why it matters: After a stretch where companies saw abundant amounts of VC cash pouring into funding rounds, the Volvo spinoff company turned to its own shareholders with its back against the wall.
Driving the news: Volvo Car AB is providing an 18-month, $800 million loan, per Bloomberg. It includes an option to convert it to equity in a possible future raise.
- Chinese billionaire Li Shufu has committed an equal amount via a firm he controls, PSD Investment.
- Shufu is the founder and largest shareholder of Volvo Cars' parent company, Geely.
Zoom in: Polestar's on track to deliver about 50,000 cars this year, CEO Thomas Ingenlath said in a statement, but the company's share price has been battered.
- It's trading around 70 cents, down from a peak of $5.46 in November 2021.
Meanwhile: The company this year has sold only about 6,615 of its hybrid Polestar 1 and electric Polestar 2 vehicles in the U.S., per the Automotive News Research & Data Center.
- That's far behind EVs from other automakers — including EV-only upstart Rivian, which has encountered severe manufacturing problems.