Polestar has obtained a loan of up to $600 million from its majority owner, Geely Holding, as the company faces a cash shortage amid a slowdown in global EV demand.

The subordinated loan, provided through Geely’s Swedish unit, does not count toward Polestar’s $5.5 billion debt covenants, giving the company additional financial flexibility.

The final $300 million portion of the loan will require Geely’s approval based on Polestar’s future liquidity needs.

As with many EV startups, Polestar has burned through substantial cash while trying to scale, facing ongoing challenges with debt and liquidity management. T

he company has frequently renegotiated loan terms and covenants to remain compliant. In June, it also secured a $200 million equity injection from PSD Investment, a firm controlled by Geely founder Li Shufu.