Polestar secures a $600 million loan from Geely to stay afloat

Polestar, the brand that originally began as the high-performance division of Volvo, has received a loan commitment of up to 600 million dollars from its main shareholder at present, the Geely Group. Half of this substantial sum will be available immediately, while the remainder will be granted as the company’s situation evolves.

This financial support comes at a critical moment for Polestar, which has been accumulating losses and has come close to being delisted from the US Nasdaq.

The company’s results over the last few quarters show a worrying trend. In the third quarter of 2025, Polestar recorded net losses of $365 million, 13 percent more than in the same period of the previous year. But that is not the end of it: in the first nine months of the year, net losses reached $1.56 billion, an increase of 80 percent over the previous year. The gross margin plunged to -34.5 percent, largely affected by a $739 million accounting adjustment to the value of the Polestar 3. The brand’s most recent electric SUV has failed to meet its initial sales expectations.

Not everything is negative

Despite all these difficulties, total sales have grown significantly over the past year. So much so that revenue between January and September rose by 48.8 percent to $2.17 billion. The main challenge now is containing costs, especially with the launch of new models such as the Polestar 5, a high-end luxury grand tourer with a 650 kW propulsion system.

On the other hand, to avoid being delisted from Nasdaq, where its share price had remained below one dollar for too long, Polestar carried out a reverse stock split. That is, it consolidated thirty old shares into each new one. After this operation, the share price rose to around $12, thus surpassing the critical threshold, and it currently stands at about $17.

This new $600 million loan comes from Geely Sweden, a Swedish subsidiary of the Chinese Geely Group, and is subordinated debt. In the event of bankruptcy, it is only repaid after priority creditors have been satisfied. This structure can serve as a liquidity cushion when access to conventional bank credit becomes difficult, or it can encourage banks to offer financing on better terms by reducing their risk.

Finally, it should be noted that this is not the first time Geely has come to the aid of Polestar. In June, the group’s founder, Li Shufu, injected $200 million through a capital increase, raising the stake of his investment firm PSD to 44 percent. In total, Li Shufu controls 66 percent of Polestar through PSD and Geely’s Swedish subsidiary, while Volvo Cars, which is also largely owned by Geely, holds 16 percent of Polestar. This means that close to 80 percent of the company is in the hands of Li Shufu.