Polestar retail sales fell 4.0% in the second quarter to an estimated 17,296 cars, the Geely-backed brand said on Thursday, its first year-on-year quarterly decline since 2024 and a sharp reversal for a company that grew 34% last year.
The drop came against the hardest comparison in Polestar‘s history, the 18,026 cars it sold in the second quarter of 2025, its strongest quarter on record.
Chief Executive Michael Lohscheller led instead with the half-year figure, calling “record sales in the first half of the year, despite regulatory and market headwinds” a significant achievement, and pointing to growth in the UK, Germany, South Korea and Iberia.
First-half retail sales reached 30,423 cars, a record for the period, though the increase over the prior year amounts to 0.4%, or 134 cars.
The figures are Polestar‘s own preliminary estimates, and the company defines retail sales as cars handed to end customers across all channels, including fleet, rental and internal sales, which it notes may or may not generate revenue directly.
Beyond the US Exit
Polestar introduced a new measure alongside the results, reporting retail sales excluding its US business separately, a change it attributed to the decision by US authorities under the Connected Vehicle Rule that will bar the brand from the country from the 2027 model year.
The new metric does little to soften the quarter.
Excluding the US, second-quarter sales fell 3.9% to 16,175 cars, almost exactly matching the 4.0% decline in the total.
Of the 730 fewer cars Polestar sold in the quarter, 643, or 88.1%, came from the business outside the US, while the American operation accounted for just 87 cars, or 11.9%.
Implied US sales fell 7.2% in the quarter, to about 1,121 cars from 1,208, a decline far shallower than the collapse in the rest of the business.
Polestar is now clearing its remaining American inventory through a campaign it has branded the “Summer of Clarity Event”, offering a cash incentive of $25,000 on the 2026 Polestar 4 and up to $23,000 on the 2025 Polestar 3.
Additionally, the brand offers zero-percent financing over 60 months, lease credits of $19,000 and $20,000, respectively, and a loyalty bonus of up to $4,000 for existing owners.
The offers run only to July 31, with delivery required by that date, and cover the last two models Polestar sells in the country, after it withdrew the Polestar 2 last year when tariffs on China-built cars made importing it uneconomic.
The discounts push the rear-motor Polestar 4 to about $32,800 from a sticker near $57,800, a reduction of more than 40%.
Over the half, the picture flips: implied US sales fell 27.8% to about 1,861 cars, while the rest of the business grew 3.1%, which is why the exclusion flatters the six-month number and not the quarterly one.
Industry data compiled by Motor Intelligence, which measures the American market on a different basis, puts the fall steeper still, with US sales down 42.2% to 1,895 cars over the same period.
The Network Paradox
Lohscheller said the retail network now stands at 235 sites, a 39% increase on a year earlier, as the company continues its shift to an active selling model.
Against that, half-year volumes edged 0.4% higher.
The pattern has been building. At the end of the first quarter, Polestar operated 230 sales points, up 50% year on year, and delivered 7.0% volume growth.
Each new site is returning progressively less, and the network expansion that powered the record 2025, when Polestaropened 71 sales points and grew its retail footprint outside China by 51%, appears to be exhausting itself.
The deceleration through the quarters is stark, with year-on-year growth running at 75.8% in the first quarter of 2025, then 38.1%, 13.1%, 27.3%, 7.0% and now minus 4.0%.
Much of that early strength was arithmetic rather than momentum.
Polestar sold just 6,975 cars in the first quarter of 2024, the trough of a year in which volumes fell 15% to 44,851 as it managed the transition from a one-model brand to three, making the subsequent rebound look steeper than the underlying demand warranted.
Growth Markets, Slowing
Lohscheller named the UK, Germany, South Korea and the Iberia region as sources of strong growth, and registration data bear that out.
German registrations rose 8.0% to 1,145 cars in the quarter, after climbing 50.2% in the first, according to figures from KBA, leaving the half up 26.8% at 2,429.
UK registrations rose 6.6% to 4,935 in the second quarter, down from 12.3% growth in the first, for a first-half increase of 9.2% to 9,086.
Polestar‘s two largest UK months of the half, March and June, both went backwards, falling 1.2% and 1.6% respectively against the prior year, while the growth came from low-volume months, with January up 43.4% and February up 31.1% from small bases.
The Guidance Gap
Polestar cut its 2026 growth target earlier this year, replacing a 30% to 35% compound annual growth ambition with guidance for low double-digit volume growth, implying roughly 66,100 to 69,100 vehicles.
Reaching even the bottom of that range now requires a major second half push.
With 30,423 cars sold in the first six months, Polestar needs 35,708 in the remainder of the year to hit 66,100, against 29,830 in the second half of 2025, a jump of 19.7%.
The upper end demands 38,714 cars, growth of 29.8%.
Set against a first half that grew 0.4%, the target looks remote.
Annualising the first-half run rate produces roughly 60,800 cars for the year, an increase of 1.2% on 2025 and far below the company’s own guidance.
The Models Ahead
Lohscheller said first customer deliveries of the Polestar 5 grand tourer are set to begin, and that production of the Polestar 4 SUV has started, with first deliveries expected during the fourth quarter. The SUV variant is due to be unveiled on September 2.
An all-new Polestar 2 follows in early 2027, though not for the US, and the Polestar 7 compact SUV arrives in 2028, to be built in Slovakia in what will be the brand’s first European assembly.
The Backdrop
The quarter compounds pressure on a company already stretched.
Polestar reported a first-quarter net loss of $383 million, more than double a year earlier, as its cash fell 42% in three months to $676 million.
Majority-owned by China’s Geely through Volvo Cars, Polestar has leaned on its backers to repair its balance sheet, with Volvo and Geely Sweden converting roughly $640 million of shareholder loans into equity this year, and Volvo extending a remaining $726 million loan to 2031.
A further $300 million came from an equity placement with investors including Crédit Agricole CIB and Vida Finance, and the company renegotiated covenants on a $950 million club loan for 2026.
The strategic response has been to lean into Europe. Polestar entered Estonia, Latvia and Lithuania, taking its European footprint to 31 markets, consolidated Polestar 3 production at Volvo‘s plant in South Carolina, and will build the Polestar 7 in Slovakia from 2028, its first European-assembled car.
Shares have fallen more than 90% from their post-listing highs of the SPAC era.
Europe now accounts for close to 80% of Polestar‘s retail sales, and with the American market closing, the brand’s fortunes rest almost entirely on a continent where its own numbers show volumes went backwards this quarter.
