Polestar observes a significant surge in quarterly sales by 84% during Q1 of the year 2025
Polestar, the Swedish-Chinese electric vehicle manufacturer, is making significant strides in reshaping its business activities and reducing costs, as announced by its CEO, Michael Lohscheller. This transformation is evident in the company's growing portfolio of attractive vehicles, expanding retail network, and strategic partnership with Volvo Cars.
Collaboration with Volvo for Manufacturing and Technologies
Polestar has signed a memorandum of understanding with Volvo to develop and manufacture its upcoming Polestar 7 compact electric SUV at Volvo’s factory in Košice, Slovakia. This facility is Volvo's third European plant and will start producing Polestar 7 ahead of its planned 2028 launch. The Polestar 7 will share its technological base and architecture with forthcoming Volvo models within the Geely automotive group, reflecting a strategy of component sharing to optimize production and product development efforts.
This partnership is part of Polestar’s plan to expand its sales network and production footprint in Europe, complementing its existing manufacturing operations in China and the United States. By integrating Volvo’s established European manufacturing with Polestar’s distinct design and performance features, the brand aims to strengthen its position in key markets, especially its home market in Europe, while broadening its vehicle lineup.
Growing Retail Sales and Network
Polestar's retail sales have been on the rise, with a 38% increase year-on-year in Q2 2025 and a 51% rise in the first half of the year. This growth is attributed to the expansion of its retail presence across 27 global markets and the continual roll-out of new models (Polestar 2, 3, and 4 currently, with 5, 6, and 7 planned). The collaboration with Volvo supports this sales expansion by ensuring a steady supply of new vehicles such as the Polestar 7, thereby enhancing Polestar’s capacity to serve more customers through an extended and more robust sales network.
Financial Performance
In Q1 2025, Polestar's revenue reached $608 million, up 84.2% year-over-year. The net loss for Polestar in Q1 2025 was $190 million, down 31.2% from the same period in 2024. Despite the net loss, Polestar is selling more cars with improved margins, which is driving revenue growth of 84%, a positive gross margin of 7%, and a decreasing net loss. The company's cash and cash equivalents stood at $732 million at the end of Q1 2025, down 6.6% from the previous year.
Future Plans
Polestar plans to double the current nine permanent locations to 17, with the first five expected to be completed by mid-next year. The company also implemented the pseudo-agency sales model in March, which is expected to contribute to its sales growth. Polestar's sales network expansion will cover additional regions beyond the major metropolitan areas of Germany.
In summary, Polestar's plan for expanding its sales model involves deepening its integration with Volvo for manufacturing and technologies, producing new vehicle models in Europe, and leveraging this collaboration to grow its global sales presence. The result is a more diverse vehicle offering and a stronger, increasingly global sales and production network supported by Volvo’s infrastructure and the larger Geely group ecosystem. Despite the challenging geopolitical environment and market conditions, Polestar is on the right track and doing the right things.
[1] Polestar Press Release: Polestar and Volvo Cars Sign MoU for Future Collaboration [2] Polestar Q1 2025 Financial Results [3] Polestar Sales Growth Continues in Q2 2025
- The strategic partnership between Polestar and Volvo extends beyond the manufacturing of Polestar 7 in Volvo's factory in Košice, Slovakia. It also involves the sharing of technologies and architectures, reflecting a strategy of component sharing to optimize production and product development efforts across the automotive industry.
- Polestar's financial performance in Q1 2025 shows a decrease in net loss and a significant growth in revenue, despite the challenging geopolitical environment and market conditions. This is due to increased car sales with improved margins, contributing to a 84% revenue growth, a positive gross margin of 7%, and a decreasing net loss.
- In line with its future plans, Polestar aims to double its current sales network, with 17 permanent locations expected over the next year. This expansion will cover additional regions beyond the major metropolitan areas of Germany, reflecting Polestar's commitment to global growth and expansion across key markets, particularly Europe, in the realm of transportation and technology.
