Polestar Shares Find Stability Through Major Shareholder Support

Polestar Auto.adr/a US7311052010

In a session marked by broader electric vehicle sector uncertainty, Polestar Auto (ADR) shares advanced approximately 4.2% to trade at $19.45 by late morning. This uptick represents a partial recovery following a period of significant volatility and coincides with mounting pressures across the EV supply chain. While competitors face challenges, including collapsed battery agreements, Polestar is being bolstered by fresh capital commitments and its ownership structure.

• Share Price Movement: +4.21% to $19.45 (mid-session)
• Recent Capital Injection: A $300 million equity commitment secured in mid-December, supplemented by a renewed credit facility from its core shareholders.
• Market Valuation: Approximately $1.29 billion, following a 1-for-30 reverse stock split executed in early December.
• Earnings Overview: Third-quarter 2025 revenue grew 36% year-over-year to $748 million. The gross margin stood at -6%, and the trailing twelve-month net loss was approximately $1.86 billion.

Sector-Wide Headwinds Intensify

The investment landscape for electric vehicle manufacturers has deteriorated recently, fueled by developments among key suppliers. A prominent South Korean battery materials provider wrote down the value of its supply contract with Tesla by over 99%, from $2.9 billion to just $7,400. Furthermore, LG Energy Solution terminated supply agreements with Ford and FBPS earlier this month, deals valued at an estimated $6.5 to $8 billion, citing a reassessment of growth expectations for the EV market. Such moves are eroding confidence throughout the supply network and creating headwinds for all industry participants.

Strategic Backing from Geely Alliance

A critical factor differentiating Polestar is its deep integration within the Geely ecosystem. A controlling stake of over 50% is held collectively by Zhejiang Geely Holding, Volvo Cars, and PSD Investment. This ownership group has not only provided the recent equity infusion but also renewed a credit facility. This direct support has offered the stock near-term stability and is likely to mitigate immediate liquidity concerns. However, whether this backing is sufficient to address underlying issues of demand and profitability will depend on the company's operational execution through 2026 and conditions in key component markets.

Liquidity and the Road Ahead

In the short term, the new capital provides Polestar with breathing room after its shares declined roughly 19-20% the prior week and underwent the reverse split. Looking forward, two factors will be decisive: first, the successful implementation of its 2026 operational plan, and second, the management of upcoming debt maturities. Market observers note that the breakdown of supply contracts elsewhere could signal impending pressure on prices and demand or, potentially, create more favorable purchasing conditions for automakers. From a technical perspective, the stock is currently attempting to establish a support level around the $19 mark. While the shareholder and capital structure provides a foundation, a sustained recovery will require improved operational metrics and consistent positive cash flow.