Written byMa Xiaolei.
EditZhang Linyu.
DesignZhao Haoran.
Reuter.
Author/ marie mannes
On February 28, Polestar announced that it had earned 9US$500 million in external financing, a three-year loan, provided by 12 banks, including BNP Paribas, HSBC and Shanghai Pudong Development Bank. Polestar**, with gross margins of more than 10% by the end of 2024. As of December 31, 2023, Polestar had approximately 7$500 million.
The round of financing will help the company fill the funding gap left by Volvo's divestment. As soon as the news came out, Polestar's stock price was **185%。
Investor enthusiasm for EV makers has cooled as EV sales growth slows and losses widen, making life especially difficult for start-ups. Tesla and BYD's price cuts have put more pressure on competitors.
In early February, Renault CEO Luca de Meo said it would suspend plans to go public on its electric vehicle business, Ampere, due to a downturn in capital markets.
Against this backdrop, Polestar's financing is even more difficult.
The most important thing for us is to be able to concentrate on launching a new car. It (the financing) provides the funds needed to complete the Polestar and 4 projects this year and the five models that will join in 2025. Thomas Inglath, chief executive officer, said.
Polestar has launched two SUVs, the Polestar 4 is rapidly increasing sales worldwide, and the Polestar 3 has already started production in China and successfully completed its first pre-production in South Carolina, USA. In addition, the Polestar 5, a performance GT concept, will also accelerate its launch in 2024.
In the automotive industry, $1 billion is enough for a car manufacturer to complete the development of a new model.
Li Donghui, CEO of Geely Holding Group and member of the board of directors of Polestar, said that as a strategic partner and important shareholder of Polestar, Geely Holding will continue to provide comprehensive operational and financial support for the brand. "We will hold a stake in Polestar for the long term and participate in Polestar's future financing plans in due course. ”
Polestar said it expects this year's sales growth to support its goal of selling more than 155,000 units a year by 2025. Commenting on the Polestar 3 and 4 models launched this year, the company said: "As both SUVs reach full production and global distribution, sales and margins are expected to grow in the second half of 2024. ”
Polestar was originally a high-performance brand established by Volvo Cars through acquisitions, but in 2017 Volvo Cars proposed a full electrification transformation, and then in October of the same year, Polestar announced its independence as a joint venture between Volvo Cars and Geely. In June 2022, Polestar was listed on the NASDAQ** exchange in New York.
Unfortunately, Polestar, which has two powerful financiers behind it, has not only become a trump card, but has also been in the red.
In 2023, Polestar delivered only 54,600 vehicles worldwide, falling short of its target of 60,000. Its performance in the capital markets has also been poor, and since its listing in the United States through a merger through a special purpose acquisition company in June 2022, its share price has repeatedly hit new lows, and has reached 87% so far. At the end of January, Polestar also said it would lay off about 450 people worldwide, or about 15% of its workforce, due to tough market conditions.
Analysts say Volvo has provided it with about $1 billion in financing. To break even by 2025, Polestar needs another $1.3 billion.
On 1 February, Volvo said it would no longer provide funding to Polestar and would focus its financial resources on meeting its own needs. In the future, Geely will take over the baton to provide operational and financial support to Polestar, expanding synergies in basic technology, ** chain, manufacturing and other aspects.
Subsequently, according to Reuters, Volvo plans to take 62% of its 48% stake in Polestar7% of the equity is allocated to Geely Holdings, with a value of about 9.5 billion Swedish kronor (about 66.5 billion yuan).300 million yuan).
If the proposal is approved at the 2024 Annual General Meeting of Shareholders, Volvo's shareholding in Polestar will be reduced to 18% after the proposed distribution is completed. At present, Geely Holding*** has expressed its support for the distribution. If the shareholding adjustment is completed, Geely Sweden Holdings, a subsidiary of Geely Holding Group, will become a significant shareholder of Polestar Auto.
In recent years, Volvo's involvement in Polestar has also been criticized by analysts, who believe that "Volvo's 48% stake in Polestar has become a drag due to the excessive consumption of resources by Polestar." ”
In response, Jim Rowan, President and CEO of Volvo Cars, said: "We have an important operational and financial relationship with Polestar, so it is logical that we maintain Volvo's influence by holding a smaller stake of 18% in Polestar."
According to the plan, Volvo Cars aims to achieve full electrification by 2025, when the proportion of pure electric models will reach 50%, and the rest will be hybrid models; In 2030, it will become a pure electric luxury car company, and all new Volvo cars will be pure electric vehicles by then. Volvo Cars will continue to accelerate its electrification transformation in line with its strategic plan.
And the complex and brutal market competition has undoubtedly increased the difficulty of Polestar's turnaround. In 2023, Meizu Group and Polestar officially announced the establishment of a new joint venture, Polestar Technology, which is committed to becoming a leading intelligent device integration technology company. Among them, Polestar owns 49% of the shares, and Meizu holds 51% of the shares.
It is understood that the new joint venture will become the only authorized sales and service entity of Polestar in China, and Polestar plans to transfer about 130 business personnel originally in Polestar China to the joint venture. From Polestar China to Polestar Technology, opening up the Chinese market has become a necessary way for Polestar to turn around against the wind.
Polestar has average sales in the global market, but it already has a certain market share in the European market. For Geely, Polestar can help the group better expand into the global market, which is what Geely needs right now.