EV startup Polestar was recently flirting with bankruptcy. The company, which started as an engineering team modifying Volvos for racing in the late 2000s, was spun out of Volvo in October 2017 as a standalone brand focusing on electric cars.
Last November, Polestar was looking at a $1.3 billion shortfall when Geely Holding and Volvo Cars stepped up to fill the gap and keep the company above water until 2025. During that time, it hoped to get the Polestar 3 and 4, crossover models with higher margins, out the door.
But last week, Volvo turned off the tap and stopped funding the unprofitable EV maker to focus on its in-house battery technology.
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Polestar shares have struggled as the carmaker failed to ramp production and EV demand started to cool. Without a net, Polestar was looking for another cash infusion, and last week, about a dozen lenders gave the carmaker another $950 million loan, according to Fortune. The loan went through after Geely committed to supporting the cash-starved subsidiary.
As of Friday, the company was worth less than $3 billion, a precipitous fall from the $20 billion when it was first listed on the market. As the fortunes of several EV efforts remain in doubt, with Rivian cutting 10% of staff and Fisker looking for a lifeline from large automakers, it's unclear whether or not Polestar will see the other side of this slump.
Despite the infusion, Polestar is still some $350 million short, and the company will likely have to restructure to make the difference.
