Polestar, the high-end electric car brand under Geely Holdings, is facing unprecedented challenges in the Chinese market. Recently, the company closed its last directly operated store at L+ Plaza on The Bund in Shanghai, officially withdrawing from physical retail in China.
Polestar stated that the closure of the store does not mean giving up on the Chinese market. It is part of optimizing and adjusting the retail model, which will be completed in the fourth quarter.
The official explanation is that shifting to online sales is a rational response to market demands.
However, public reports indicate that Polestar’s online car purchase system has been shut down and test drive services have long ceased. The remaining inventory consists of vehicles produced in December 2024, with prices slashed to around fifty percent of the original price.
Data shows that Polestar’s sales decline in China was not sudden. From 2021 to 2023, its sales in China were 2048, 1717, and 1100 vehicles, respectively, showing a decreasing trend year by year. Even in 2024, retail sales were only 1864 vehicles, far from reversing the decline. In the first half of this year, Polestar’s sales data in China were extremely bleak, with only 6 units sold in June. Sales were zero in April and May, and only 1 unit was sold in March.
In fact, Polestar has undergone strategic adjustments, shifting from domestic sales-driven to export-oriented. China has become an important production center, producing Polestar 2 in Taizhou, Polestar 3 in Chengdu, Polestar 4 in Ningbo, and Polestar 5 in Chongqing, but the target markets for these models have already shifted to international markets. Polestar’s global sales in the first three quarters of this year are close to 45,000 units, with the majority produced in China.
Over the past eight years, Polestar’s personnel changes in China have been frequent, with an average of changing leadership every year. In the past six months, the global management team has undergone significant adjustments, with the general manager of the China region also changing at the end of July. Corresponding to the frequent personnel changes, the company’s strategy has also shown instability and repeated shifts in direction.
At the same time, Polestar has been in financial difficulty. From 2020 to 2024, Polestar’s accumulated losses exceeded $5.1 billion, with a net loss of $2 billion in 2024 alone. By the end of 2024, the company’s total assets were only $4.054 billion, while total liabilities were as high as $7.383 billion, already in a state of insolvency.
Polestar’s stock performance has also been poor. Since its listing in 2022, Polestar’s stock price has plummeted by over 90%. In 2024, the stock price even dropped below $1, leading the company to receive a “lack of compliance notice” from Nasdaq.
Polestar’s latest plan shows that they aim to achieve an annual retail sales growth of 30% to 35% between 2025 and 2027 and strive to achieve profitability in 2025.