Polestar’s presence in China, once considered a crucial pillar of its global electric vehicle ambitions, is rapidly eroding. The Swedish-Chinese brand has seen its retail footprint in the country shrink to a single store in Shanghai, while online sales have been suspended and test drives are only available by phone appointment.
For many observers, this signals more than a strategic pause, but may mark the beginning of a full market withdrawal. Through the first half of 2025, Polestar sold only 69 vehicles in China, with monthly sales dropping to … zero in April and May.
This collapse in demand has prompted Chinese media outlets to report that the brand considers a complete exit from the Chinese market by year-end. While Polestar officially maintains that it is “assessing the best path forward” in China, the signs of retreat are increasingly difficult to ignore.
Not really Chinese?
It seems a defeat for the electric-only brand Polestar. Its majority owner, Geely chairman Li Shufu, is a Chinese businessman, while the country is the world’s largest market for both combustion-engined models and battery-powered cars.
But, therefore, China is also the most competitive. Polestar’s minimalist Scandinavian design language and premium positioning have failed to resonate, mainly when similar offerings can be found within the Geely Group’s portfolio: from Zeekr to Lynk & Co (brands with good sales performance).
Polestar is perceived as European rather than Chinese and is confronted with the same fate as Mercedes, BMW, Audi, or Porsche: value-driven buyers continuously gravitate toward domestically favored brands. In a reaction, the brand has replaced its China CEO, but apparently to no avail.
Further complicating the picture is Polestar’s financial health. The company reported €3.03 billion in negative net assets at the end of 2024, with cumulative losses since 2020 exceeding €4.64 billion.
In June, an investment arm controlled by Li Shufu provided a €182 million capital injection, increasing Geely’s direct stake to 66 percent. Meanwhile, Volvo Cars, also navigating bad weather, reduced its stake from 18 to 16 percent.
International performance
However, there’s light in the tunnel. The company’s downward trajectory in China contrasts sharply with its global performance. In the same six-month period, Polestar delivered over 30,000 vehicles globally—a 51 percent increase from the previous year.
The rollout of new models, such as the Polestar 3 and 4, alongside expanded market entry in France and physical retail growth through Volvo’s dealership network, has bolstered the brand’s international footprint.
Despite these mounting speculations, Polestar insists that it remains committed to the Chinese market in the long term, describing current developments as a strategic realignment rather than a full retreat.
