Polestar Q2 Sales Fall 4% Amid US Regulatory Headwinds

Swedish electric vehicle manufacturer Polestar announced a 4% year-over-year decline in its second-quarter sales volumes, a development that follows a significant U.S. regulatory decision that will bar its new vehicles from the American market. The company, which has been struggling to achieve profitability, is now intensifying its focus on the European market amid uncertain global demand for EVs.

U.S. Market Ban

In a key decision last month, the U.S. Commerce Department denied Polestar authorization under the Connected Vehicles Rule, citing the company's ties to its majority owner, China's Geely Holding. The ruling effectively bans the sale of new Polestar models in the United States beginning with the 2027 model year.

This decision contrasts with that for its sister brand, Volvo Cars, which received a special authorization. Polestar stated it will continue to sell its existing U.S. inventory of Polestar 3 and Polestar 4 models and maintain its service network. However, the ban casts uncertainty on the future of the Polestar 3, its only model manufactured in the U.S.

Sales Performance and Strategy

Polestar reported the following key figures for its second quarter:

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• Deliveries: 17,296 vehicles, compared to 18,026 in the same period last year.
• Market Focus: Europe accounted for 80% of its sales in the first half of the year, signaling a strategic pivot away from the U.S.

Amid tariff pressures and a challenging market, Polestar has opted to refresh existing models like the Polestar 2 and 4 rather than launch entirely new ones. CEO Michael Lohscheller noted that production of the Polestar 4 SUV has started, with first deliveries expected in the fourth quarter, and that initial customer deliveries of the Polestar 5 are also set to begin.

Industry Context

The sales dip comes after Polestar reported a wider first-quarter loss in May, attributing it to pricing pressure and U.S. tariffs. The headwinds are not unique to Polestar, as rival Porsche also recently reported a decline in first-half deliveries, citing market pressure in China and the expiration of U.S. EV tax credits. This highlights a broader slowdown and increased competition within the global electric vehicle sector.