Gothenburg, Sweden-based electric vehicle innovator Polestar (Nasdaq: PSNY) has secured a $200 million equity investment from PSD Investment Limited, a long-time backer and an entity controlled by Eric (Shufu) Li, founder and chairman of Geely Holding Group. The strategic capital injection will be used in Polestar’s growth trajectory as it scales up operations, launches new models, and positions itself more aggressively against market leader Tesla.
The investment was structured as a private investment in public equity (PIPE), with PSD purchasing nearly 190.5 million newly issued Class A American Depositary Shares (ADS) at $1.05 each – aligned with Polestar’s five-day volume-weighted trading average. To maintain compliance and avoid crossing the 50% voting threshold, PSD will convert 20 million of its Class B shares into Class A shares prior to the deal’s closing.
Fuel for a growing fleet of Tesla rivals
The $200 million boost will help Polestar finance working capital needs and general corporate purposes, including the launch and scaling of multiple new electric vehicle models. These include the sleek Polestar 5 four-door GT, the sporty Polestar 6 roadster, and the upcoming Polestar 7 compact SUV, which is expected to be manufactured in Europe – a strategic expansion from its current production bases in North America and Asia.
Polestar is gaining momentum in a highly competitive global EV market, and this latest investment sets the stage for a fresh wave of innovation. While Tesla still leads in EV volume and software-driven features, Polestar is differentiating itself with Scandinavian design, sustainability, and precision engineering. The company has also integrated Android Automotive OS into its infotainment systems, offering seamless Google-powered user experiences, something Tesla has yet to match.
Climate commitment as competitive advantage
Polestar is more than just a Tesla alternative; it’s positioning itself as a climate-conscious brand with clearly defined environmental goals. The company aims to halve per-vehicle greenhouse gas emissions by 2030 and become climate neutral by 2040. These targets are part of a broader sustainability strategy encompassing climate, transparency, circularity, and inclusion, areas that are increasingly influencing consumer and investor decisions in the automotive space.
Backed by Geely and with a presence in 28 markets across Europe, North America, and Asia-Pacific, the company is building a global platform designed to scale both revenue and responsibility.
Challenging Tesla’s dominance with a European edge
With Tesla aggressively expanding production capacity and reducing prices globally, as per analysts, Polestar is taking a more curated approach: fewer models, sharper design, and a laser focus on premium performance with purpose. This funding round reinforces its long-term vision and bolsters its credibility among investors, especially as many EV startups struggle to meet profitability or secure capital.
Beyond Tesla, Polestar also faces stiff competition from a growing field of electric vehicle manufacturers, especially in the premium, design-driven, and sustainability-focused segments. In the luxury EV space, it competes directly with brands like Lucid Motors, known for high-performance vehicles like the Lucid Air; BMW’s i Series with models like the i4 and iX; Mercedes-Benz’s EQ line, including the EQE and EQS; and Audi’s e-tron series, such as the Q4 and Q8 e-tron. Porsche also poses competition with its Taycan and upcoming Macan EVs, especially in the performance EV category.
Polestar also faces overlap from Volvo’s EX30 and EX90 – relevant as they share the same parent company, Geely, with the EX30 in particular competing with the upcoming Polestar 7. In the broader sustainability and innovation space, Polestar is up against Chinese automakers like NIO and BYD, both rapidly expanding globally with tech-rich models. South Korean players Hyundai and Kia are also strong contenders, offering critically acclaimed EVs like the IONIQ 5, IONIQ 6, and EV6, which compete on price, range, and design appeal. Other notable challengers include Genesis, Fisker, and VinFast, each targeting niche areas of the premium EV market.
