Polestar has announced a new $200 million investment from PSD Investment, owned by Geely Holding founder Li Shufu. The Swedish electric vehicle manufacturer will issue over 190 million Class A shares (American Depositary Shares), thereby strengthening its capital.
Li Shufu takes control of Polestar
Following the transaction, Li Shufu will control up to 66 percent of Polestar through PSD and Geely's Swedish subsidiary, while Volvo Cars' stake will be reduced from 18 percent to 16 percent.
This injection of funds comes at a critical time: Polestar is facing sluggish demand in the electric vehicle market, just as competition grows increasingly fierce.
An essential investment
Until now, Polestar has managed to finance itself through loans from various banks, without Geely or Li Shufu injecting equity. This operation thus marks a change in policy and a new impetus to secure the business.
Use of funds and share conversion
The investment—in the form of a PIPE (Private Investment in Public Equity) transaction—is intended to secure Polestar's working capital and finance its operations. PSD Investment plans, before the closing of the transaction, to convert 20 million of its Class B shares into Class A to prevent its voting power from exceeding 50 percent.