Polestar Automotive Holding UK PLC reported a net loss of $365.3 million for the third quarter of 2025, on revenue of $748 million. The loss widened from the $323 million loss recorded in Q3 2024, reflecting a continued erosion of profitability despite a 36% year‑over‑year revenue increase. The company’s gross margin fell sharply to –6.1% from –1.2% in the same quarter last year, a deterioration driven by higher tariffs, residual‑value guarantee costs in North America, and a shift toward lower‑margin Polestar 3 and Polestar 4 models.
The quarter’s results were further dented by a $739 million impairment charge recorded in Q2 2025, specifically related to the Polestar 3 SUV. The charge was a one‑time hit that pushed the Q3 loss higher, but it does not reflect ongoing operating performance. Polestar’s revenue of $748 million missed the consensus estimate of $850 million, underscoring a shortfall in demand relative to analyst expectations. The company’s cash position stood at $995 million as of September 2025, but liquidity concerns remain as the firm seeks additional financing to meet debt covenants.
Management highlighted that the revenue growth was largely driven by higher volumes of the Polestar 3 and Polestar 4, as well as a surge in carbon‑credit sales, which contributed $123 million in the first nine months of 2025. CEO Michael Lohscheller said the company is “making progress in our commercial transformation” and is expanding its dealer network across 28 markets. However, he cautioned that the U.S. market would not be pursued aggressively “at any cost” due to financial exposure, reflecting a strategic pivot toward Europe where 77% of sales occurred in H1 2025.
Polestar’s stock fell in early trading, with a pre‑market decline of 7.5% and a broader drop of over 9% in the day. The market reaction was driven by the revenue miss, the widening net loss, and the announcement of a reverse stock split aimed at maintaining Nasdaq listing compliance. Investors viewed the reverse split as a sign of financial distress, amplifying concerns about the company’s ability to sustain growth and meet debt obligations.
The company’s guidance for the remainder of 2025 remains cautious. Polestar has not updated its full‑year revenue or earnings outlook, but the management’s comments suggest a focus on cost discipline and a measured approach to expansion. The widening loss and deteriorating margins signal that Polestar will need to accelerate cost‑control initiatives and secure additional financing to navigate a competitive, tariff‑heavy market environment.
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