Following Volvo’s decision to decrease its ownership and reduce funding for Polestar earlier this year, the electric vehicle company sought $1.3 billion in new financing. It secured a $950 million lifeline in the form of a three-year loan from a banking group led by BNP Paribas and informed investors of its intentions to raise the remaining funds within this year. Geely Holdings, the parent company of Volvo and a Chinese conglomerate with various investments including Levc, Lotus, and Smart, emerged as the second-largest shareholder of Polestar. Meanwhile, Volvo retained 18 percent and still had a pending $1 billion convertible loan.

According to Polestar’s communication with investors, the objective is to achieve double-digit profit margins by year-end. During its most recent earnings call, investors were informed that the company is vigorously striving to enhance cashflow and aims to break even by late 2025. The new facility in South Carolina is expected to contribute significantly towards this goal, as analysts anticipate that it will ramp up production volume and render Polestar’s EVs eligible for the US EV tax credit of up to $7,500 based on the vehicle specifications, potentially attracting more customers. Speculation has arisen about whether Polestar will postpone the introduction of the Polestar 4 in the US until it can shift production to South Korea by 2025, thereby avoiding tariffs.

“There is heightened competition, and interest rates have surged, posing challenges for companies like Polestar in scaling up,” remarked Andres Sheppard, senior equity analyst at Cantor Fitzgerald.

However, Polestar’s adjusted financial figures for 2023, which were revealed last Friday after a prolonged delay, cast a shadow on its outlook: Net losses soared to $1.17 billion, operating losses expanded by over 11% from $1.29 billion to $1.46 billion, and revenue decreased by 3% to $2.38 billion. Despite a 6% rise in car sales, these losses outweighed the slight uptick. Polestar missed its sales target of 60,000 vehicles, having delivered only 54,600 vehicles the previous year.

The belated publication of these results in itself served as a caution: Had the release been delayed till July, Polestar risked delisting from Nasdaq due to missing mandatory financial deadlines, a consequence of accounting inaccuracies causing delays.

The company’s stock price has undergone a consistent decline over the past year, with an 8% drop recorded at premarket opening on Tuesday, to which Ingenlath expressed dissatisfaction, deeming it “unjust.” He assured investors that “our current stock price does not accurately reflect our company’s value—neither now nor in the future.”

This indicates a wider-than-anticipated gap between Polestar’s current status and its desired position. Projections by market research firm Pitchbook indicate that the company aims to reach £3.51 billion ($4.43 billion) in revenue this year, with a whopping 145.5% growth anticipated to reach £8.62 billion ($10.9 billion) by 2026. This presents a considerable challenge for Kristian Elvefors, the current Global Head of Sales, who succeeded Mike Whittington earlier this year after serving as Volvo’s Managing Director in the UK. Elvefors has outlined a strategy to expand the company’s retail network across Asia, Europe, and Latin America by 2025 and introduce online car configuration and ordering for customers. A concerning development, however, is the recent halt in Hertz’s plan to purchase tens of thousands of Polestar vehicles this year, retracting from a previously agreed estimated deal worth $3 billion in 2022 to supply a quarter of their fleet with Polestars by 2024.