Polestar may be facing a possible ban in the US, but the Sweden-by-way-of-China manufacturer isn’t going to let that stop it from releasing new products. The company provided a business update on Thursday, during which it announced a new model, the Polestar 7 compact SUV, that will be produced in Europe.
Little was revealed about the Polestar 7 — we didn’t even get a look at a prototype — but the company said it will be a “very progressive SUV” with “a strong USP,” or unique selling point. It’s unclear when the vehicle will go into production or even where in Europe it will be built. (Sweden seems like a likely bet.)
“We will enter the compact SUV segment, by the way the biggest and fastest growing segment in the world, and we will obviously make sure it comes with all the Polestar DNA,” the company’s new CEO, Michael Lohscheller, said.
The update, which took the form of a professionally produced sit-down interview with Lohscheller, didn’t touch on Polestar’s regulatory trouble in the US. The Biden administration recently finalized a ban on connected vehicle software from China, a move that Polestar has said would “effectively prohibit” it from selling EVs in the US.
In fact, the US wasn’t mentioned at all during the 27-minute video — perhaps a reflection of the strong headwinds EVs are facing under the incoming Trump administration. Instead, the company said it expects to launch soon in France, which is one of the fastest-growing markets for EVs.
This represents a significant shift in the company’s position from the past few years. Polestar was laser-focused on the US market with the Polestar 3, a three-row SUV manufactured at its factory in South Carolina in order to qualify for generous incentives under the Biden administration. EV sales were looking strong when the Polestar 3 was announced, but now sales have slowed thanks to high prices, charging challenges, and politics. Many of those incentives put in place by President Joe Biden are likely to be eliminated under President-elect Donald Trump.
Polestar also reported its third quarter earnings today (the company is lagging behind other companies in reporting its earnings), including a $323 million net loss. It sold 12,548 cars, which was down 8 percent compared to its Q3 sales in 2023.
The company also said it no longer expects similar revenue in 2024 as it earned in 2023, nor a positive gross profit margin for the fourth quarter. Instead, Polestar is expecting “a mid-teens percentage decline in revenue and a negative gross margin around the same level as full year 2023, as the fourth quarter product mix was negatively impacted by fewer than expected Polestar 3 and Polestar 4 sales.”
But amid these challenges, Lohscheller said he was convinced that Polestar was still on the right track. He predicted “positive” adjusted earnings for 2025 and free cash flow, in which Polestar would be generating more money from its business operations than it is losing in 2027.
“Really, 2024 is a transitional year for Polestar,” said Lohscheller, who previously served as CEO of the Stellantis-owned Opel. “But I feel we are well positioned now going into 2025 with the right cars, with the right distribution, and obviously a much much better focus on significant cost reduction and increasing efficiency.”