Polestar Loss Widens as Tariffs and Discounts Pressure Margins

Polestar reported a wider first-quarter loss as pricing pressure and U.S. tariffs weighed on margins despite higher sales volumes.

The automaker posted a net loss of $383 million for the quarter, compared to $166 million a year earlier, while shares fell nearly 8 percent following the results.

Tariffs and pricing pressure weigh on Polestar margins

Polestar said revenue remained broadly flat at $633 million during the January through March period. The company attributed some of the pressure to its sales mix, with fewer higher-priced Polestar 3 vehicles sold and a larger share of Polestar 4 deliveries, which represented 9 percent and 67 percent of quarterly sales, respectively.

The automaker has introduced discounts to attract buyers in a more cautious market environment while also dealing with higher manufacturing costs linked to U.S. tariffs, according to Reuters.

“The world around us continues to throw up challenges. This is reflected in our results for the first quarter,” CEO Michael Lohscheller said during a call with analysts. The executive did not provide a financial outlook for the year.

Despite the earnings pressure, Polestar’s Europe-focused strategy supported a 7 percent increase in sales during the quarter. Europe accounted for 78 percent of the company’s total deliveries.

Polestar focuses on refreshed models as cash position declines

To reduce costs, Polestar is prioritizing refreshed versions of existing models instead of launching entirely new vehicles. The company expects deliveries of a new Polestar 4 variant to begin later this year, while an updated Polestar 2 sedan is planned for 2027.

Its next fully new model is expected to be the compact Polestar 7 SUV.

Like many EV startups, Polestar continues to spend heavily to expand its lineup. The company recently secured additional funding through loans and equity support from Geely and banks, while Volvo Cars is converting debt into equity. Polestar also received approval for a 50 million euro increase to its green trade finance facility.

The automaker’s cash position fell to $676 million at the end of the first quarter, down from $1.16 billion three months earlier. Expenses during the quarter also increased due to higher sales commissions, one time personnel costs, and marketing spending.

Polestar said it expects to publish second quarter sales results on July 9.

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