Polestar, the premium electric vehicle brand under Volvo – the Swedish carmaker majority-owned by Geely – is expected to fully withdraw from the Chinese market by the end of this year.
In the first half of the year, Polestar sold a mere 69 cars in China, with zero sales in April and May. This starkly contrasts with Polestar's global performance, where it delivered 30,300 vehicles during the same period, a 51% increase year-over-year.
Signs of this retreat emerged earlier, according to CarNewsChina. The joint venture between Polestar and Star Meizu, Polestar Times Technology, ceased operations in April. The company also underwent significant management changes, with China CEO Wu Huijing recently departing and being replaced by Hu Shiwen as the legal representative.
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Polestar 1 - two-door sports car with a hybrid engine. Photo: Zhihu |
Polestar 1 - two-door sports car with a hybrid engine. Photo: Zhihu
Polestar currently maintains only one direct sales store in China, located in Shanghai. Its online purchasing system has been shut down, and test drives require appointments by phone, indicating a near-complete halt in market operations.
These developments reflect Polestar's financial difficulties. The company reported negative net assets of 3.329 billion USD at the end of 2024, with total liabilities of 7.383 billion USD against 4.054 billion USD in assets. Polestar has accumulated losses exceeding 5.1 billion USD since 2020, including a net loss of 2 billion USD in 2024 alone.
In June, PSD Investment Limited, a major investor in the Geely Holding group controlled by chairman Li Shufu, injected 200 million USD in emergency cash into Polestar. This transaction increased Li Shufu's total stake in Polestar to 66%, while Volvo's share decreased from 18% to 16%.
Industry analysts question whether this cash infusion is sufficient to address Polestar's financial challenges, especially as the company aims for profitability in 2025 amid fierce global competition in the electric vehicle market.
Polestar originated as Flash Engineering in 1996, a Swedish racing team. The team was sold and renamed Polestar Racing, beginning to modify Volvo cars for racing in the late 2000s.
In 2009, the brand became Volvo's official partner for enhancing existing models under the Polestar Performance brand. In July 2015, Volvo acquired Polestar and began selling Polestar-upgraded vehicles through its dealerships.
In October 2017, Volvo and Geely announced Polestar as an independent brand focused on electric vehicles. Europe is currently Polestar's largest market, accounting for 75% of its global sales, according to Reuters.
The automaker hopes that in the medium term, France will become one of its best-selling markets in Europe, with the UK and Sweden currently leading. Polestar strives to compete with other premium brands such as Mercedes, BMW, Audi, and Tesla.
My Anh
