Polestar’s Financial Crossroads: Surging Sales Clash With Profitability Concerns

The Swedish electric vehicle manufacturer Polestar finds itself navigating a complex financial landscape, where impressive delivery growth contrasts sharply with persistent profitability challenges. While the company’s latest sales figures demonstrate strong market traction, significant asset write-downs continue to cast shadows over its financial performance.

Quarterly Performance: Delivery Momentum Versus Financial Headwinds

Recent operational data reveals substantial progress in vehicle deliveries. During the third quarter of 2025, Polestar reported shipping 14,192 vehicles to customers, representing a 13 percent increase compared to the same period last year. The year-to-date performance appears even more robust, with 44,482 vehicles delivered already matching the company’s entire previous annual volume. This achievement translates to a notable 36 percent growth rate.

However, these operational successes unfold against a backdrop of financial strain. The second quarter brought a substantial $739 million impairment charge related to Polestar 3 assets, creating significant pressure on the company’s balance sheet. This exceptional financial burden overshadowed what would otherwise have been positive revenue news—$791 million in quarterly sales that actually exceeded market expectations.

Strategic Shifts and Margin Pressures

In response to ongoing cost challenges, Polestar has initiated a strategic pivot toward European manufacturing. The company announced a collaboration with Volvo Cars to produce the new Polestar 7, a compact premium SUV, at the Kosice facility in Slovakia starting in 2028. This partnership aims to leverage synergies between the automotive brands and reduce development expenses—a crucial move given the company’s margin constraints.

Should investors sell immediately? Or is it worth buying Polestar Auto.adr/a?

Financial reports show some marginal improvement, with the adjusted gross margin reaching 1.4 percent in the latest half-year results, up from negative 2.6 percent previously. Despite this directional progress, the figure remains modest and highlights the competitive intensity within the electric vehicle sector, where multiple manufacturers are vying for market share amid pricing pressures.

Market Sentiment and Upcoming Catalyst

Investment analysts maintain a cautious stance toward Polestar, with consensus ratings hovering around “Hold” and price targets ranging between $1.00 and $1.25 per share. These projections suggest some potential upside from current trading levels, but the investment community appears to be awaiting clearer signals of sustainable profitability.

The next significant milestone arrives on November 12, when Polestar will disclose comprehensive quarterly results. This announcement will provide critical insight into whether the company’s sales expansion is finally translating into improved financial fundamentals beyond top-line growth.

For market participants, Polestar represents a high-risk proposition with an uncertain outcome. While delivery statistics confirm consumer acceptance of the brand’s vehicles, the persistence of financial losses means investment in the company carries substantial risk until profitability becomes more established.