Electric vehicle (EV) manufacturer Polestar has received a $900 million loan from its parent company, Geely, just before shuttering its final research and development (R&D) facility in the United Kingdom. This move highlights the financial pressures facing the brand despite growing sales.
Geely’s Financial Backing
Geely, which also controls brands like Lotus, Lynk & Co, and holds a majority stake in Volvo, extended the $900 million as a shareholder loan. This classification means it does not contribute to Polestar’s existing $8.25 billion debt. The loan is being released in stages, with the second half contingent on Polestar’s future liquidity. This conditional funding underscores the ongoing scrutiny of the company’s financial performance.
UK R&D Closure and Job Losses
On December 19, 2025, Polestar closed its last UK R&D center, resulting in 130 job losses. This follows earlier announcements in 2024 of a broader workforce reduction of 450 positions from a global staff of 2,100. The company stated the closure was due to the completion of engineering work on the Polestar 5, and a shift towards utilizing group platforms and technologies. Consolidating R&D operations in Gothenburg, Sweden, is intended to streamline development efforts.
Financial Struggles Despite Sales Growth
Polestar reported a $548 million loss in the third quarter of 2025 (July–September), adding to a previous $1.55 billion loss in the prior quarter. Despite a 36% increase in year-to-date deliveries (from 32,595 to 44,482 vehicles), the company’s profitability remains under pressure. These losses are compounded by import tariffs in the US, shifting emissions regulations, and the removal of key EV incentives.
Market Challenges and Incentive Changes
The US federal EV tax credit ($7,500) and used EV incentive ($4,000) were discontinued in September 2025, further straining Polestar’s sales potential. In Australia, the government is also reviewing its Fringe Benefits Tax exemption for fuel-efficient vehicles, which could impact future EV adoption. Despite these headwinds, Polestar Australia has seen a 42% increase in year-to-date sales through November, reaching 2,188 vehicles compared to 1,536 in the same period last year.
Future Product Pipeline
Polestar plans to launch an 800-volt version of the Polestar 3 in 2026 and introduce the Porsche Taycan-rivaling Polestar 5 in Australian showrooms. The Polestar 5 was developed in the now-closed UK R&D facility.
Polestar’s survival hinges on its ability to navigate ongoing financial challenges and adapt to shifting market conditions. Securing Geely’s financial support is a short-term solution, but long-term profitability will depend on streamlining operations and responding effectively to regulatory changes and consumer demand.
