Geely’s electric vehicle unit Polestar raises $550 million

Sweden’s Polestar, the electric automaker controlled by Volvo Cars, and its parent, Geely, has raised $550 million in external funding, according to the company.

The financing is Polestar’s first external funding and comes amid a year of sustained sales and share price increase for electric vehicles (EV) makers such as Tesla Inc and Nio Inc.

“Our new investors have recognized that Polestar offers an alluring combination of established industrial and technological capability alongside superlative growth potential as the global auto industry goes electric,” Polestar’s CEO Thomas Ingenlath said according to Reuters.

The funding will help speed up product development and output as Polestar plans to launch new car models in the coming years.

Polestar constructs hybrid performance cars in the western Chinese city of Chengdu and a sedan model at its Taizhou plant in the east. It also has a new model in development called Precept, a larger, more eco-friendly sedan which it showcased at last year’s China auto show.

Chinese investors Chongqing Chengxing Equity Investment Fund Partnership and Zibo led the funding and were backed by South Korean investor I Cube Capital, according to Polestar.

Polestar said it is in ongoing discussions with other investors about extra fund raising.