Polestar’s half-year filing discloses that one of its Chinese loan facilities required the company to reach 30,000 retail sales in the six months to June, failing which the lender could claim repayment of 25% of the outstanding balance every month thereafter.
Polestar reported 30,423. The margin was 423 cars, equivalent to 1.4%.
The Geely-backed brand places the two figures in consecutive sentences and states that it was not in breach of its Chinese loan covenants as of June 30.
It does not disclose how the loan agreement itself defines retail sales, so what follows is an observation about the published metric rather than about the contract.
Polestar’s footnote calls retail sales “sales to end customers” and then specifies that the total includes internal vehicles and vehicles handed over with repurchase obligations attached — 2,166 and 1,384 respectively in the first half, 3,550 cars in all, both figures given as estimates subject to revision.
Strip out the internal vehicles alone and the reported total falls to 28,257.
H1 2026 Figures
Retail sales of 30,423 compare with 30,289 a year earlier, growth of 0.4%.
Both components that are not sales to outside customers grew faster than the total. Internal vehicles rose 13.6% and vehicles with repurchase obligations rose 41.4%.
Excluding both, the underlying figure was 26,873 against 27,404, a decline of 1.9%.
Polestar sold about 80% of its volume in Europe in the half, 6% in the United States and 14% elsewhere.
Loss Improved
Net loss narrowed 29.4% to $842.4 million from $1,193.1 million.
That improvement is almost entirely the absence of an impairment. The first half of 2025 carried $723.5 million of impairment expense; the first half of 2026 carried a net reversal of $1.2 million.
On the measures that strip it out, the direction reverses.
Adjusted gross margin was negative 8.5%, against positive 1.4% a year earlier — a swing from profit to loss on the company’s own preferred measure. Adjusted EBITDA deteriorated 72.5%, from negative $302.3 million to negative $521.4 million.
Free cash flow worsened 34.8%, to negative $1,061.5 million.
Revenue fell 4.4% to $1,360.1 million. Vehicle sales revenue fell 3.0% to $1,278.8 million, which against slightly higher volume puts revenue per car at about $42,000 against $43,500, down 3.4%.
Carbon credit revenue fell 27.4% to $52.4 million.
The Balance Sheet
Polestar’s total assets stood at $3.52 billion at June 30 against total liabilities of $8.25 billion. Shareholders’ equity is therefore negative $4.73 billion. Net current liabilities are $4.70 billion and the accumulated deficit is $10.11 billion.
Borrowings total $5.90 billion, of which $4.96 billion — 84% — falls due within twelve months. Cash and cash equivalents of $887.6 million cover 17.9% of that.
Cash fell from $1,159.3 million at the end of December. Operating cash outflow was $849.9 million, worse than the $497.7 million a year earlier, and investing consumed a further $210.9 million. Financing provided $768.7 million.
The Covenants
The club loan lenders agreed during the first half to amend the 2026 covenants to align with management’s updated business plan.
The MD&A dates the debt-to-asset change to March 31; the notes record the third and fourth quarter ratios and the revenue floor as agreed prior to June 30, so not every threshold was necessarily settled on the same day.
The minimum annual revenue requirement for 2026 was cut from $8,670.2 million to $3,300.0 million, a reduction of 61.9%.
Polestar’s first-half revenue of $1,360.1 million means the second half must produce $1,939.9 million to clear even the reduced figure — 42.6% more than the first half delivered.
The debt-to-asset ratio limit for the second quarter was raised from 0.85:1 to 1.50:1. The actual outcome was 1.47:1.
The equivalent limits for the third and fourth quarters were reset to 1.40:1 and 1.30:1. Both are tighter than the ratio Polestar recorded in the second quarter.
The company also faces a minimum quarterly cash covenant of €400.0 million and a cap on quarterly financial indebtedness of $5,500.0 million.
Polestar was not in default on the syndicated loan at June 30.
The $700 Million
Polestar raised $400 million in February from Feathertop Funding, a vehicle consolidated to Sumitomo Mitsui Banking Corporation, and Standard Chartered Bank (Hong Kong), and $300 million in March from purchasers including Crédit Agricole, Vida Finance, Innovator and Proximastar.
Both were priced at $19.34 per American depositary share.
The filing explains how that price was achieved. Entities controlled by Polestar’s ultimate controlling shareholder wrote put options allowing the investors to sell the shares back to them at a pre-determined price.
“These contracts were necessary to enable the transaction to close with the terms that it did, including a price per share above the market price on the date of the transactions,” the filing states, adding that Polestar “indirectly benefited from them.”
Polestar accounted for that support as a capital contribution with a fair value of $453.5 million — equivalent to 64.8% of the money raised.
Separately, Volvo Cars’ Snita converted $341.3 million of loans to equity across March and June, and Geely Sweden converted $300.0 million on June 30, comprising $250 million of principal and $50 million of accrued interest.
Class A shares rose from 2,745,232,339 to 4,898,511,300 over the half, an increase of 78.4%. The weighted average count used for earnings per share rose 88.1%. Related parties hold 60.2% of the Class A shares and all of the Class B.
The United States
Polestar was told at the end of June that the Bureau of Industry and Security would not authorise it to sell model year 2027 vehicles under the Connected Vehicle Rule.
The company has been selling down existing inventory and will stop selling new cars, retaining service and warranty support.
American revenue fell to $3.5 million from $93.8 million. That is not a clean read on demand: Polestar footnotes the line to say it was affected by the increase in residual value guarantees arising from the restructuring, which reverses revenue rather than reflecting units sold.
The cleaner figure is the company’s own estimate that US operations increased its consolidated operating loss by about $211 million in the half, against about $110 million a year earlier, including roughly $130 million of adjustments arising directly from the decision. It warns further negative adjustments should be expected.
Canadian revenue fell 62.8% to $10.3 million. Korea rose 83.7% to $100.7 million and France reached $13.5 million from $205,000 after launching in June 2025.
Sales points rose 38.2% to 235 while volume rose 0.4%. Measured crudely, against period-end sales points, that takes cars per sales point from 178 to 129.
The network grew through the half, so the true utilisation drop is smaller, but the direction is not in doubt.
Research and development expense fell to $15.3 million from $31.3 million, though the company capitalised a further $98.8 million into intangible assets.
