Polestar Plays Down Financial Struggles As ‘One-Time Loss’ After Incurring $1.1 Billion Loss

SAUDI ARABIA: The CEO of Polestar has come out to say that, despite the suggestions of liquidators that the brand Polestar is going to file for bankruptcy, the doubts surrounding the company’s future are untrue. The CEO has also claimed that the finances of the company are moving in the right direction, even though the company has recorded a net loss of USD 1.2 billion, which amounts to SAR 4,50,20,12,400. The company has claimed that these losses are a “one-time impact” of US tariffs on China and other countries globally.

Polestar is a leading brand in the EV segment, as it currently holds the longest distance traveled on a single charge in an EV SUV. However, the Chinese-owned Volvo-affiliated brand has had financial struggles for a long time. The brand has had to onboard external investors time and again when they couldn’t meet projected growth rates, and the sales were slower than expected.

When talking about the brand’s future and refuting the claims surrounding the brand’s collapse, the CEO of Polestar has said, “There was a lot of very good financial news in the [first half] H1 results. Volume was up 51 per cent, revenue was up 56 per cent. For the first time in the history of Polestar, we achieved a positive operating gross margin. Costs are coming down, and EBIT losses are also reducing, so all operational indicators show [we are headed] in the right direction, we do the right things.” 

The company has stated that the financial losses are due to increased production costs caused by US tariffs. They stated that the tariffs have also affected the profitability of the Polestar 3, which is one of the most in-demand Polestar titles.

FAQs

Q1) Will Polestar file for bankruptcy?

A) No, at the moment, there’s no information from the brand on whether Polestar will file for bankruptcy or not. The CEO of Polestar has come out to refute reports that the brand’s future is not uncertain.

Q2) What is the cause of the financial losses of Polestar?

A) As per the brand, the losses are a one-time loss caused by the US tariffs on foreign countries, and the company will soon turn around financially from these temporary setbacks.


Also Read: Ferrari Brings Back The Iconic Testarossa For The First Time Since The Mid-1990s