The fight for survival in the EV pure-play market continues.
Polestar (PSNY) announced Monday it has secured a $400 million equity investment from Feathertop Funding Limited (backed by Sumitomo Mitsui and Standard Chartered). This critical infusion comes as the Swedish automaker fights to shore up its balance sheet amidst slowing global EV demand and high cash burn.
💰 THE CAPITAL STACK: Polestar is aggressively stacking capital to avoid liquidity failure:
- Today: $400M Equity (SMBC / Standard Chartered).
- December: $300M Equity (BBVA / Natixis).
- December: $600M Loan (Geely Holding).
- Total Recent Liquidity: ~$1.3 Billion.
📉 THE CONTEXT: CEO Michael Lohscheller describes this as “progress on enhancing our liquidity position,” but the reality is starker.
- Covenant Wire: The company has historically risked breaching debt covenants and has repeatedly had to renegotiate terms with lenders to stay compliant.
- Dilution Control: Under this new deal, neither Sumitomo Mitsui nor Standard Chartered will own more than 10% of the company, preserving the existing cap table structure.
💡 ANALYST TAKEAWAY: This is “Survival Capital.” While legacy OEMs pull back on EV targets, pure-play startups like Polestar don’t have that luxury—they must burn cash to reach scale or die trying. With Geely continuing to act as the strategic backstop and global banks stepping in with equity, Polestar has successfully bought itself a runway for 2026. The question now shifts from “Will they go bankrupt?” to “Can they achieve profitability before this $1.3B runs out?”
👇 Auto Finance Pros: Is $1.3 billion enough runway to reach mass-market scale, or will Polestar need another raise by Q4?