Polestar Automotive (NASDAQ:PSNY) said Volvo Cars has agreed to convert about $274 million of an existing shareholder loan into equity, according to a company announcement.
The move follows a previously disclosed $300 million debt-to-equity conversion by Geely Sweden Holdings AB. Volvo Cars also plans to carry out an additional conversion of roughly $65 million later in the second quarter. Once both transactions are completed, Volvo Cars’ stake in Polestar is expected to remain at approximately 19.9%.
Polestar also confirmed that the maturity of its remaining $661 million shareholder loan has been extended until December 2031. The conversion price for the transaction will be calculated at 95% of the 30-day volume-weighted average share price of Polestar up to March 27, 2026.
Separately, the Swedish electric vehicle manufacturer said it intends to centralize future production of its Polestar 3 model in Charleston, South Carolina, a move aimed at improving operational efficiency.
“We are grateful for the continued support from Volvo Cars in helping us to strengthen our balance sheet and reinforce our liquidity profile,” said Michael Lohscheller, Polestar CEO.
The company said the loan conversion and maturity extension are intended to improve its balance sheet strength and extend its debt profile. The second conversion by Volvo Cars will still require regulatory approvals and must meet agreed deadlines.
Polestar currently offers four vehicle models and manufactures cars across two continents, with operations spanning 28 markets in North America, Europe and Asia-Pacific.