Electric-vehicle maker Polestar has raised $550 million from a group of Asian financial investors to accelerate its product development and sales as the Volvo Cars subsidiary prepares to expand its lineup beyond its first two models.
The private placement of newly issued shares marks the first time the 3-year-old brand has gotten the backing of external investors, which include the Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment in China.
Those three local Chinese government investment agencies have been joined by I Cube Capital, an arm of South Korean global conglomerate SK, and a range of other investors, the automaker said in a statement.
“Our new investors have recognized that Polestar offers an alluring combination of established industrial and technological capability alongside superlative growth potential as the global auto industry goes electric,” Polestar CEO Thomas Ingenlath said in a release.
Full financial details of the transaction were not disclosed.
Polestar also confirmed Thursday that it is in talks with other global investors to provide additional funds.
Polestar also plans to use the funds to boost the technological capabilities of its cars.
Last year the automaker reversed course on the Precept sedan, deciding to turn what was originally billed as a "vision" of the brand's future into a production model.
It will take three years to complete development of the brand's future flagship grand tourer, Polestar CEO Thomas Ingenlath told Automotive News Europe in September.
The production car will be underpinned by the second generation of Volvo's Scalable Product Architecture, SPA2, which is expected to offer the eyes-off, hands-off capability on the highway once such systems are approved for use.
Prior to the Precept's arrival Polestar plans to add an SUV, the Polestar 3.
The brand's debut model was the low-volume Polestar 1, a high-performance plug-in hybrid that arrived in 2019.
The Polestar 2, a mass-market full-electric compact that is a direct rival to the Tesla Model 3, debuted in 2020 and the automaker announced this week the car's range will be expanded to three variants.
Last month, media reports said Polestar was mulling an initial public offering, possibly in the U.S. or Hong Kong as well as a merger with a special purpose acquisition company.
Polestar referred to those reports as speculative and while it didn't rule out an IPO, a company spokesman said there are no current plans for one.
The EV maker could be valued at more than $10 billion in any transaction in which it goes public, the reports said.