Geely-owned electric vehicle maker Polestar has announced a $200m equity investment from PSD Investment, an existing shareholder controlled by Eric Li, the founder and chairman of Geely Holding Group.
Polestar Automotive Holding UK signed a securities purchase agreement to sell 190 million newly issued Class A American Depositary Shares (ADS) to PSD Investment.
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This $200m transaction is structured as a private investment in public equity (PIPE).
The shares are priced at $1.05 each, reflecting the volume-weighted average closing price over the five trading days preceding the agreement.
Before the PIPE transaction closes, PSD Investment plans to convert 20 million of its Class B ADS shares into Class A ADS shares.
This move is aimed at ensuring that the total voting power of its Polestar holdings remains under 50%.
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By GlobalDataPolestar plans to utilise the funds from this equity investment to meet working capital needs and for general corporate purposes.
The Swedish automaker has encountered difficulties in increasing demand for its vehicles due to a sluggish market and fierce competition. Like many other electric vehicle manufacturers, it requires additional funding, reported Reuters.
Although the automaker secured loans from various banks over the past year, further financial backing from Geely and Li Shufu, also known as Eric Li, has not been forthcoming until now.
As part of the transaction, Volvo Cars will reduce its stake in Polestar from 18% to 16%. This decision follows Volvo Cars’ move last year to decrease its investment and suspend financial support, responding to analyst concerns about the strain Polestar was placing on its resources, reported the media outlet.
In May, Polestar reported Q1 2025 revenue of $608m, up 84% from $330m in the same period of last year.
Earlier this month, Polestar expanded its market presence by launching electric vehicle sales in France.
