Sweden-based electric vehicle maker Polestar said on Tuesday it has entered into a loan agreement of up to $600 million with its majority owner, China’s Geely Holding, as the company manages liquidity challenges during a broader slowdown in global EV demand.
The shareholder loan will be provided through Geely’s Swedish unit and is structured as a subordinated facility, meaning it does not count toward Polestar’s debt covenants, which are set at $5.5 billion, a company spokesperson said. Polestar added that it continues to seek additional equity financing. The final tranche of $300 million under the agreement would require Geely’s consent, depending on Polestar’s future liquidity needs, the company said in a statement.
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Polestar has, like many EV-focused manufacturers, burned through significant cash as it seeks to scale production and sales, repeatedly facing pressure on liquidity and debt levels. The company has renegotiated debt covenants with lenders several times to remain compliant.
The latest financing follows changes in Polestar’s ownership and governance structure. In February 2024, Swedish automaker Volvo Cars announced it would stop funding Polestar Automotive Holding and transfer control of the luxury EV brand to China’s Geely Holding, Volvo Cars’ largest shareholder.
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Polestar has also taken steps to address pressures in public markets. In November 2025, the company said it would implement a one-for-thirty reverse stock split of its American Depository Shares, aimed at reducing the risk of a Nasdaq delisting. The move followed a warning from Nasdaq that Polestar’s shares could face suspension after trading below the exchange’s $1 minimum price requirement for several weeks.
In June, Polestar secured a $200 million equity investment from major shareholder PSD Investment, a company controlled by Geely Holding founder Li Shufu, providing additional financial support as the automaker works to stabilize its balance sheet.
