Investigation
Polestar to Exit Chinese Market by End of 2025
Polestar, the premium electric vehicle brand, has announced plans to withdraw from the Chinese market by the end of this year. The decision comes amid poor sales performance and significant organizational restructuring in the region.
Since its NASDAQ listing in 2022, Polestar's stock price has plummeted by 90%. Despite global growth, the brand sold only 69 vehicles in China during the first half of 2025, with zero sales in April and May. This weak market presence, limited to one outlet in Shanghai, has seen the online purchasing system shut down, and test drives now require telephone appointments.
The move aligns with major shareholders in the Geely group increasing their stakes in Polestar while Volvo’s share decreased. In June, PSD Investment Limited provided a 200 million USD cash injection to Polestar, but industry analysts have questioned whether this would be sufficient to address the brand's financial challenges.
Polestar's joint venture with Star Meizu (Polestar Times Technology) has ceased operations as part of these changes. China CEO Wu Huijing has departed from Polestar, and Hu Shiwen is now the legal representative of Polestar Automobile Sales Co., Ltd.
This decision appears to contrast with Polestar’s overall global strategy, as the company has maintained a firm commitment to fully electric vehicles and has experienced growth in other markets. However, the China-specific challenges—such as the lack of sales traction and internal restructuring—are the immediate reasons prompting the withdrawal.
Polestar aims to achieve profitability by 2025 amid intense global competition in the electric vehicle market. The brand's departure from the Chinese market, however, suggests that it may need to focus its efforts elsewhere to meet this goal.
[1] Financial Times, "Polestar to exit China as sales plummet", 1st July 2025. [2] Reuters, "Polestar to withdraw from China due to poor sales and restructuring", 1st July 2025.
Polestar's financial issues, exacerbated by poor sales in China, have led to the reconsideration of its investment strategy in the region. As a result, the company decides to withdraw from the Chinese market, focusing instead on revitalizing its business in other regions to achieve profitability by 2025.
