Electric Brand Polestar Raises $550 Million in its First External Investment Round
【Summary】Electric vehicle brand Polestar, which is jointly owned by Swedish automaker Volvo and Chinese automaker Zhejiang Geely Holding (Geely), announced it raised $550 million in its first ever outside investment round. The new financing comes as investors pour money in electric vehicle stocks and related companies working on advanced mobility, including EV battery technology and self-driving vehicles.
Electric vehicle brand Polestar, which is jointly owned by Swedish automaker Volvo and Chinese automaker Zhejiang Geely Holding (Geely), announced it raised $550 million in its first ever outside investment round.
The private placement of newly issued shares was from a group of long-term financial investors. The financial details of the transaction are not being disclosed at this stage.
The group of new investors is led by Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment. Polestar also confirmed that it's in ongoing discussions with additional global investors for additional fund raising.
The new financing comes as investors pour money in electric vehicle stocks and related companies working on advanced mobility, including EV battery technology and self-driving vehicles. The flood of new investments helped make Tesla the world's most valuable automaker in 2020.
"Our new investors have recognised that Polestar offers an alluring combination of established industrial and technological capability alongside superlative growth potential as the global auto industry goes electric," says Thomas Ingenlath, CEO of Polestar.
Polestar plans to use the funds to accelerate its product development. The company plans to launch several ground-breaking EVs in coming years.
Polestar is a dedicated performance-oriented electric brand. The company is headquartered in Gothenburg, Sweden, and its vehicles are available in ten global markets across Europe and North America and China.
As a new EV brand co-owned by Volvo and Geely, Polestar is competing with Tesla, BMW and other EV startups like Lucid Motors and Xpeng. The company's first mass-market vehicle is the Polestar 2, a 5-door fastback that's more affordable than the Tesla Model S, with a starting price of $59,900 in the U.S.
The performance-oriented Polestar 2 is also being positioned as a direct competitor to Tesla's mass-market Model 3. The Polestar 2 is priced competitively with the Tesla's Model 3 Performance version, which starts at $56,990 in the U.S.
Polestar says the EV will offer sportscar-like performance. The Polestar 2 is rated at more than 400 horsepower, and can go from zero to 60 mph in about five seconds. The EV features an all-wheel drive powertrain and 78 kWh battery pack with a WLTP range of 292 miles (470 km).
The Polestar 2 is also the world's first vehicle to come with Google's Android Auto OS, which allows drivers to use Google's popular app such Maps without having to sync a smartphone.
Polestar is adopting Tesla's direct to consumer sales model. The company will not have a traditional network of dealerships and instead open retail showrooms called "Polestar Spaces."
Last month, Polestar announced that it's expanding its retail presence in the U.S., with plans to open Polestar Spaces in 15 new cities by the end of 2021. The retail locations serve as showrooms where customers can learn more about the brand and the Polestar 2 EV.
Polestar said it plans to use its retail network to sell about 50,000 electric vehicles a year by 2023.
Since the EV company launched three-and-a-half years ago, Polestar has developed its own high-quality manufacturing capability in China and built a global sales and distribution operation.
In March, Polestar announced a partnership with EV charging operator ChargePoint that will give Polestar drivers access to one of the world's largest EV charging networks.
Polestar launched its first vehicle named the Polestar 1 in 2017. The Polestar 1 is a limited edition, 600 horsepower hybrid EV supercar costing $155,000. The vehicle served as a platform for the automaker to show off its innovative technology.
Bloomberg reported last month that Polestar is exploring options for going public as soon as this year at a valuation of more than $10 billion.
Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.
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