Despite a global rebound in performance during the first quarter of 2025, Polestar has dramatically scaled back its operations in China, the world’s largest electric vehicle (EV) market.
Media outlets such as Bloomberg reported that Polestar has recently shuttered two-thirds of its retail locations in China. Of the original 36 stores, only 10 now appear on Polestar’s official app, which is used for scheduling test drives and making purchases. Sources also indicate that the company is phasing out operations of its local joint venture sales entity.
This move stands in stark contrast to Polestar’s official denial of market exit rumors just a month ago. CEO Michael Lohscheller had insisted that the company wasn’t abandoning China but rather prioritizing certain markets. However, the reality of significant store closures seems undeniable.
In 2024, Polestar managed to sell only 3,120 vehicles in China. This figure pales in comparison to the country’s total new energy vehicle sales of approximately 12.9 million units during the same period. Local brands such as BYD, Geely, Xiaomi, Li Auto, and Xpeng have demonstrated overwhelming competitiveness in price, performance, and technology, leaving little room for Polestar’s European-style business model.
Despite its struggle in China, Polestar’s global sales for the first quarter of 2025 showed a 76% year-over-year increase, signaling a recovery. With China accounting for a mere 7% of total sales, the company is shifting its focus to better-performing markets like the UK, France, and the United States.
Polestar plans to expand its dealer network from 35 to 60 in the U.S. by the end of 2024, leveraging Volvo’s existing dealership infrastructure. Looking ahead, Polestar aims to boost global sales of its Polestar 3 and 4 models, focusing on European and North American markets while redefining its brand identity and recognition. The company faces the challenge of establishing itself as a distinctive brand in the increasingly competitive EV market alongside established players like Volvo, Cadillac, and Tesla.
