Investors had been losing confidence in electric vehicle (EV) maker Polestar Automotive (PSNY 0.85%) over the last month. That is until today. In that time Swedish automaker Volvo announced that it would stop funding the EV start-up in which it owns a nearly 50% stake. That came after Polestar said it would miss its 2023 vehicle production target.

The company delivered 54,600 vehicles last year, versus its target of about 60,000. But after an announcement of new funding and an optimistic business outlook yesterday, Polestar shares are soaring. As of 10:25 a.m. ET, Polestar stock had surged 10.1%.

Nearly $1 billion in funding

Even though Volvo decided to end its funding support just as the EV maker ramps up production, the Swedish carmaker isn't abandoning it completely. Volvo's top shareholder is China-based Geely Holding. Geely would be taking over the support of Polestar's growth.

But yesterday Polestar announced it has secured $950 million in funding on its own. A group of international banks will provide the company with a new three-year loan facility. Polestar CEO Thomas Ingenlath stated, "Together with Geely's full financial support and access to innovative technology and engineering expertise, we have reinforced our path toward cash flow break-even targeted in 2025."

Seeking profits

Polestar has detailed three important targets for investors to watch looking toward 2025:

  • Achieving cash-flow breakeven
  • Annual vehicle production volume of over 155,000
  • Gross margin in the high teens

Yesterday it said it was postponing the release of its full-year 2023 financial report to give it more time to comply with reporting requirements. But it did provide investors with its business update.

It believes a strong second half of 2024 will allow it to achieve its 2025 goals as its two SUV models ramp up to full production and global distribution. Some investors jumped into the stock on that news, though it might make more sense to approach the stock with some skepticism until it starts to report those production and financial results.