Five-year-old Polestar's affiliate and shareholder Volvo Cars will provide an 18-month $800 million loan. The other major shareholder, PSD Investment Ltd., controlled by Chinese billionaire Li Shufu, is committing an equal amount through direct and indirect financing and liquidity support.
The financing "allows Polestar to focus on delivering more cars to more customers," CEO Thomas Ingenlath told analysts on a quarterly earnings call Friday. "We are on track developing the company, our product portfolio, our business."
Polestar said the new investment will help capitalize the company through 2023.
The funding "allows us time to unlock a broader range of longer-term financing alternatives when conditions in the capital markets improve," CFO Johan Malmqvist said.
Polestar's stock has shed more than half its value since June 24, when the automaker went public through a merger with a special-purpose acquisition company.
Canaccord Genuity Managing Director George Gianarikas said Polestar's ability to tap deep-pocketed shareholders is fortunate, given tightening capital markets.
"It's not always the company with the best business plan or product that wins, but the one with the best balance sheet," Gianarikas said. "Companies that raise money at the right time survive well past their sell-by date just because they have a lot of money in the bank."