By LIU Zeran
With its balance sheet under pressure, Chinese automaker Geely's high-end EV marque, Polestar, has been sent back to the capital market to raise more funds.
Polestar is planning to raise up to US$1 billion (7.3 billion yuan) by gradually selling different types of equity. A company spokesperson described the plan as “routine.”
Originally a Volvo sports car, Polestar has transformed into a pure electric vehicle company, with weak software and unable to compete with domestic rivals. Since entering the Chinese market in 2017, Polestar has undergone five changes of leadership, each with different ideas about marketing and promotions, resulting in a brand with no identity.
This new plan comes less than a year after the last round of financing. In November last year, Polestar received a much-needed injection of US.6 billion from its two major shareholders, Volvo and PSD.
Polestar is facing challenges in production and delivery. Since the beginning of this year, Polestar's stock has fallen by nearly 64 percent with the company facing risks of equity dilution.
Q1 revenue was US$540 million (4 billion yuan), a YoY increase of 20.7 percent, but below market expectations, with the UK accounting for 28.8 percent and the US 20 percent. Sales in China made up only 1.4 percent of revenue.
In Q2, a loss of US$300 million prompted Polestar to announce that it is seeking more routine funding, blaming one-time expenses.
Polestar has factories in China and plans to start production in a factory shared with Volvo in South Carolina to lower prices in the US market through federal EV subsidies. The company has cut its sales forecast from 80,000 vehicles to 70,000.
