The recently introduced Polestar 3 is the third model from Volvo's sporty sub-brand and it's first SUV, and it marks the start of an entire new-model offensive. A new model will be launched every year until 2026, including a large sedan and a sports car. In order to be able to realize these ambitious plans in the coming years, Polestar has now received a capital injection of $1.6 billion from its two largest shareholders.
$1.6 Billion Dollar Investment Continues Polestar's New Model Campaign
During recent quarterly earnings releases, Polestar CEO Thomas Ingenlath told analysts and investors Volvo had given its sporty sub-brand an $800 million, 18-month loan. The Swedish brand had also received the same amount from its other main shareholder, PSD Investment Ltd., but it was both direct and indirect financing and liquidity support, he said.
According to Ingenlath, the additional capital will allow Polestar to focus on delivering more cars to more customers. CFO Johan Malmqvist added that Polestar had bought itself time with the financing to develop a broader range of long-term financing alternatives in the future. This will be the case as soon as conditions on the capital markets improve. So, it seems that rising interest rates and production costs will push the small brand with big ambitions to the edge of its liquidity limits, making it necessary, for the time being, to call on the support of its big partners. According to Reuters, start-ups such as Rivian and Canoo are also currently facing this problem.
Big Ambitions For The Future
According to its own figures, Polestar could deliver 50,000 vehicles by the end of 2022, which would be almost double that of 2021. The Swedish brand expects even stronger growth in the next two years when the brand's first SUV, the Polestar 3, rolls onto the road in early 2023. In 2024, the model range will be expanded further with the Polestar 4, a smaller SUV with a coupe-like body on the same basis. In all, Polestar hopes to sell around 290,000 vehicles by the middle of the decade and then, for the first time in its still young history, realize a profit.
But this is not the end of the brand's product offensive. The launch of a large sedan, the Polestar 5, is already on the agenda for 2025, and the lineup is to be crowned in 2026 with the Polestar 6 sports car. This model is intended to be a Porsche competitor, which makes it clear where the brand wants to go in the future.