Polestar, the high-end electric vehicle brand under Geely Holding, is facing unprecedented challenges in the Chinese market. The latest data shows that the brand’s sales plummeted to only 6 vehicles in June, with a total sales volume of less than 70 vehicles in the first half of the year, almost grinding business to a halt.
The performance of Polestar in the Chinese market, as indicated by the latest retail sales data, is alarming. Sales in June this year dropped to single digits, with only 6 cars sold; sales data for April and May couldn’t even be properly displayed; and in March, only 1 vehicle was sold. Throughout the first half of the year, Polestar’s cumulative retail sales in China did not exceed 70 vehicles, painting a worrying picture for Polestar’s business in China.
According to a report by “Yicai” on July 29, Polestar’s test drive service in China now only supports phone reservations, and the online car purchase system and store have been shut down, leaving only one offline store in Shanghai on the Bund. These changes have sparked widespread speculation in the market about whether Polestar will completely withdraw from the Chinese market.
Facing external doubts, insiders from Polestar have publicly stated that the brand will continue sales in the Chinese market but is undergoing a deep transformation of its sales model, which is expected to be completed in the fourth quarter of this year. This adjustment is seen as a key move for Polestar to cope with its current predicament and restructure its presence in the Chinese market.
In April this year, Polestar announced the termination agreement with Meizu, ending the operation of their joint venture in China – Polestar Era Technology (China) Co., Ltd., and reclaiming the distribution rights in the Chinese market. Polestar Technology was established in June 2023 with the aim of strengthening Polestar’s localization capabilities in China, but its establishment did not lead to a significant improvement in Polestar’s sales.
Data shows that Polestar’s struggles in the Chinese market have been ongoing. From 2021 to 2023, its sales in China were 2048 vehicles, 1717 vehicles, and 1100 vehicles respectively, demonstrating a continuous decline. Even in 2024, the first full year after the establishment of Polestar Technology, retail sales were only 1864 vehicles, failing to reverse the decline.
In comparison, Polestar’s performance in the global market has been relatively better. In the first half of this year, global retail sales reached 30,300 vehicles, a 51% year-on-year increase, with sales in the second quarter totaling 18,000 vehicles, a 38% increase compared to the previous year. However, the growth in global sales has not eased its financial pressure.
Polestar was established in 2015 and moved its production base to China after being acquired by Volvo, a subsidiary of Geely Holdings. In 2017, it split from Volvo to operate independently, with joint ownership by Geely Holdings and Volvo.
Financial data indicates that Polestar is facing serious profitability challenges. From 2020 to 2024, the company’s accumulated net loss has exceeded $5.1 billion, with a net loss of over $2 billion in 2024 alone.
As of the end of 2024, Polestar’s total assets were $4.054 billion, while total liabilities were $7.383 billion, indicating insolvency.