Polestar Secures $200m Equity Investment from PSD Investment to Meet Working Capital Needs

Polestar secures $200m equity investment from PSD Investment, controlled by Eric Li, founder and chairman of Geely Holding Group. The investment will be used to meet working capital needs and for general corporate purposes. Polestar plans to convert 20 million of its Class B ADS shares into Class A ADS shares to ensure that PSD Investment's total voting power remains under 50%. Volvo Cars will reduce its stake in Polestar from 18% to 16%.

Polestar, the Swedish electric vehicle (EV) manufacturer, has secured a significant $200m equity investment from PSD Investment, a company controlled by Geely Holding founder Li Shufu. The investment, announced on June 17, 2025, is part of a private investment in public equity (PIPE) transaction that will provide working capital and fund general corporate purposes for Polestar.

The transaction involves the sale of 190 million newly issued Class A American Depositary Shares (ADS) to PSD Investment. This investment will increase PSD Investment's stake in Polestar to 44%, with Li Shufu holding a total of 66% through PSD Investment and the Swedish subsidiary of Geely. This equity injection follows Polestar's recent challenges in boosting demand for its vehicles amid a softer market and intense competition [1].

Polestar has faced financial challenges and has received loans from banks in the past year. However, the company has not received further financial support from Geely and Li Shufu until now. The transaction will also reduce Volvo Cars' stake in Polestar from 18% to 16%. This reduction follows Volvo Cars' decision to cut its holding and halt financial support last year due to analyst concerns about the strain Polestar was placing on its resources [2].

As part of the PIPE transaction, PSD Investment plans to convert 20 million of its Class B ADS shares into Class A ADS shares. This move is aimed at ensuring that PSD Investment's total voting power in Polestar remains under 50% [2].

Polestar plans to utilize the funds from this equity investment to meet working capital needs and for general corporate purposes. The Swedish automaker has encountered difficulties in increasing demand for its vehicles due to a sluggish market and fierce competition [2]. Despite securing loans from various banks over the past year, further financial backing from Geely and Li Shufu has not been forthcoming until now.

In May, Polestar reported Q1 2025 revenue of $608m, up 84% from $330m in the same period of last year. Earlier this month, Polestar expanded its market presence by launching electric vehicle sales in France [2].

References:
[1] https://www.timeslive.co.za/motoring/news/2025-06-17-polestar-secures-200m-investment-from-geelys-li-shufu/
[2] https://www.just-auto.com/news/polestar-secures-200m-equity-investment/