Polestar, a Swedish electric vehicle manufacturer based in Gothenburg, has recently secured a $200 million equity investment from PSD Investment, an existing shareholder controlled by Eric Li, the founder and chairman of Geely Holding Group. The investment comes in the form of a private investment in public equity (PIPE), with PSD Investment purchasing 190 million newly issued Class A American Depositary Shares (ADS) at $1.05 each.
Prior to the completion of the transaction, PSD Investment plans to convert 20 million of its Class B ADS shares into Class A ADS shares to ensure that its total voting power in Polestar remains below 50%. The funds from this equity investment will be used by Polestar to address working capital needs and for general corporate purposes.
Polestar has been facing challenges in boosting demand for its electric vehicles amidst a slow market and intense competition. The company has previously obtained loans from various banks but has been in need of additional financial support from Geely and Eric Li. Volvo Cars, which currently holds an 18% stake in Polestar, will reduce its ownership to 16% as part of the transaction. This decision follows Volvo Cars’ move last year to decrease its investment in Polestar due to concerns about the strain on its resources.
Despite the challenges, Polestar reported a significant increase in revenue in the first quarter of 2025, reaching $608 million, an 84% rise from the same period last year. In an effort to expand its market presence, Polestar recently launched electric vehicle sales in France.
The company’s partnership with PSD Investment and the influx of funds are expected to help Polestar navigate through the competitive electric vehicle market and drive growth in the future. The investment reflects confidence in Polestar’s potential and paves the way for further innovation and development in the EV industry.
