Polestar has secured a financial lifeline after announcing a new term loan facility of up to US$600 million from its majority owner, Geely Sweden Holdings AB. The agreement comes as Polestar continues to burn cash while scaling its operations.
Under the terms of the credit agreement, Polestar can access the loan for general corporate purposes. The facility is split into two tranches, with the final US$300 million subject to lender approval and tied to Polestar’s future liquidity requirements. Importantly, the loan is structured as subordinated, meaning it does not count toward Polestar’s existing debt, which stand at approximately US$5.5 billion.
The financing arrives as Polestar works to stabilize its balance sheet amid a broader slowdown in EV demand and rising cost pressures across the industry. Like many newer EV manufacturers, Polestar has burned significant cash while scaling production and expanding its global footprint.
This isn’t the only financial lifeline provided to Polestar over the last few years. Earlier this year the automaker also secured a US$450 million loan, which followed a larger US$950 million loan in 2024 from 12 international banks.
The funding news also follows a difficult third-quarter financial report. While Polestar posted year-over-year growth in deliveries and revenue, losses widened sharply. The company reported a Q3 net loss of US$365 million, compared to US$323 million a year earlier, driven by higher production costs, pricing pressure, and losses tied to residual value guarantees in North America.
CFO Jean-Francois Mady acknowledged the difficulties at the time, saying, “The result of Q3 has been clearly disappointing for us… we are continuing suffering pricing pressure on our vehicles in addition to having a higher cost of production due to the duties.”
Despite the financial strain, Polestar continues to expand its lineup, launching deliveries of the Polestar 4 in Canada and the U.S. this week.
