Polestar said on Wednesday that Geely Sweden Holdings AB and Volvo Cars have converted a combined $640 million of shareholder loans into equity since the start of 2026, completing a restructuring first announced late last year.
The struggling EV maker saw its gross margin swing to negative 3.2% in the first quarter of the year, citing intensified pricing pressure, EU and US tariff impacts, lower carbon credit sales, and one-off effects.
Geely converted approximately $300 million and Volvo converted approximately $66 million on June 30, closing out the final tranche.
Volvo had already converted approximately $274 million on March 31, bringing its total to approximately $340 million. Geely‘s $300 million tranche, executed in full on June 30, rounds out the $640 million figure.
Geely‘s conversion was priced at $19.34 per share — the same price used across Polestar’s equity raises since December 2025.
Volvo‘s cumulative $340 million conversion was priced at 95% of the 30-day volume-weighted average price of Polestar shares through March 27, according to Wednesday’s filing.
Polestar carried out a one-for-thirty reverse stock split on its US-listed shares late last year to maintain its Nasdaq listing, after being warned that its stock traded below $1.00.
Shares hit a post-split low of $11.75 shortly after the consolidation took effect.
Polestar closed the first half of the year at $18.78.
Shares fell approximately 10.8% on June 25 after the brand was banned from selling 2027 Model Year vehicles in the US market.
Since the 2022 SPAC merger that took Polestar public, the stock has crashed approximately 95% on a split-adjusted basis.
Remaining Volvo Cars Loan
Volvo Cars‘ remaining shareholder loan of approximately $660 million now matures in December 2031, following a previously announced extension from December 2028.
Extending the maturity by three years removes a near-term refinancing obligation from Polestar‘s balance sheet.
Polestar CEO Michael Lohscheller said the conversions, together with further extensions of existing facilities, improve the company’s capital structure and lengthen its debt maturity profile “as we continue the ramp-up of our new product portfolio.”
Green Trade Finance Facility
Separately, Polestar increased its Green Trade Finance Facility by €50 million to €450 million ($57–512.7 million) after adding Fubon Bank (Hong Kong) Limited to the lending syndicate.
Standard Chartered Bank continues to act as structuring bank and facility agent for the facility.
Polestar said the increase took effect on June 5, following completion of the relevant syndicate documentation.
Polestar and Geely Sweden also agreed on June 3 to extend a subordinated term loan facility — initially provided to Polestar in December 2025 — to June 30, 2027.
Broader Capital Restructuring
Wednesday’s conversions are the latest piece of a broader capital restructuring that has reshaped Polestar‘s balance sheet over the past year.
Since June 2025, the company has secured $1.2 billion in fresh equity across four tranches.
PSD Investment Limited, an entity controlled by Geely founder Li Shufu, contributed $200 million in June 2025.
Natixis and BBVA followed with $300 million in December 2025.
Feathertop Funding Limited, a special purpose vehicle consolidated to Sumitomo Mitsui Banking Corporation, and Standard Chartered Bank (Hong Kong) added $400 million in February.
In the following month, Crédit Agricole CIB, Vida France, Innovator Limited and Proximaster Holdings closed the final $300 million round.
Concurrent with their equity investments, each of those financial institutions entered into a put option arrangement with a wholly owned subsidiary of Geely Sweden Holdings AB — effectively giving Geely Sweden a backstop role over the investors’ downside risk.
During the same period, Polestar renewed or newly secured approximately $4.6 billion in debt facilities, including approximately $2.4 billion in working capital facilities, the €480 million ($547 million) Green Trade Finance Facility (since restructured and increased), and approximately $570 million in working capital loans renewed in the first quarter of 2026.
Financial Pressure Remains Elevated
Polestar ended the first quarter of 2026 with a cash position of $676 million, down from $1.159 billion at the end of 2025.
CFO Jean-François Mady attributed the decline to adjusted EBITDA losses, negative working capital movements and net repayment of financing facilities, partially offset by equity proceeds received during the quarter.
First-quarter revenue came in at $633 million, virtually flat against $632 million a year earlier, despite a 7% increase in retail sales to a record 13,126 vehicles.
Gross margin swung to negative 3.2% from a positive 10.3% in the first quarter of 2025, driven by intensified pricing pressure, EU and US tariff impacts, lower carbon credit sales and one-off effects.
Adjusted EBITDA loss widened to $235 million from $96 million a year earlier. Net loss more than doubled to $383 million from $166 million.
For full-year 2025, Polestar reported revenue of $3.06 billion — crossing the $3 billion mark for the first time — on retail sales of 60,119 vehicles, a 34% year-over-year increase.
Net loss for the year reached $2.36 billion, largely driven by approximately $1.05 billion in non-cash impairment charges.
Average loss per vehicle stood at roughly $39,200 for the full year, though the first-quarter 2026 rate improved to approximately $29,200.
US Market Loss
Capital restructuring efforts come as Polestar faces the loss of the US market from the 2027 model year.
Last week, the US Department of Commerce’s Bureau of Industry and Security declined to grant the brand an authorization under the Connected Vehicle Rule, which bars manufacturers owned or controlled by China from selling connected vehicles in the country.
Software restrictions under the rule take effect with the 2027 model year, and hardware restrictions follow later in the decade.
Because the prohibition applies regardless of where a vehicle is built, even US-assembled Polestar 3 units rolling off the same Ridgeville, South Carolina plant as authorized Volvo models will be blocked once the 2027 model year begins.
Volvo, which shares Polestar‘s ultimate controlling shareholder in Geely Holding Group, secured its own authorization roughly a month before Polestar‘s denial.
Lohscheller said in response to the denial that Polestar would continue investing in markets where growth opportunities remain, including Southeast Asia, Eastern Europe, Latin America and Canada.
Europe already accounts for approximately 78% of global retail sales volumes, and the company expanded into three new European markets — Estonia, Latvia and Lithuania — in June.
Guidance and Product Pipeline
Polestar guided for “low double-digit” retail volume growth in 2026, implying approximately 66,000 to 69,000 deliveries.
A year earlier, the company had set a 30-35% compound annual growth target — roughly 20 percentage points higher.
First-quarter volumes of 13,126 vehicles annualise to about 52,500, below even the reduced guidance midpoint, though Polestar‘s sales historically skew toward the second half of the year.
Four new models are planned over the next three years in what Lohscheller has called the largest product offensive in Polestar‘s history.
European deliveries of the Polestar 5 grand tourer are expected to begin this summer.
A new Polestar 4 variant — described by Lohscheller as combining the space of an estate with the versatility of an SUV — is expected in the final quarter of 2026, followed by an all-new Polestar 2 in early 2027 and the Polestar 7 compact SUV in 2028.
Polestar also intends to consolidate Polestar 3 manufacturing at its Ridgeville, South Carolina facility to drive production efficiencies.
Production of the Polestar 7 is planned for Europe, further diversifying the brand’s manufacturing footprint away from China.
