Polestar posts loss, plans steps to offset tariffs on China-made EVs

Electric vehicle (EV) maker Polestar said it will have to take steps to offset hefty EU and US import tariffs on its Chinese-made electric cars as it posted a first-quarter operating loss on Tuesday.

The Swedish-based company, controlled by China's Geely, currently makes all its EVs in China.

Its new model, the Polestar 3, will be made in the US from the end of this summer and the Polestar 4 will be produced in South Korea starting in the second half of 2025.

While Polestar has been working to reduce its reliance on Chinese production, its Polestar 2, its biggest seller to date, will continue to be made exclusively in China.

US-listed shares in the company were down 6% in premarket trading.

Steps it plans to announce later this year could include material cost reductions across the supply chain or other actions, a spokesperson said, but added the plans do not include further job cuts.

In the meantime, Polestar faces provisional tariffs of 20% proposed by the European Commission on cars it imports into the EU and duties of more than 100% in the US.

Polestar said there would be no customer delays due to tariffs and that it would not be possible to produce the Polestar 4 other than in China or South Korea.

Like others, it faces a worsening demand outlook for EV makers, where a price war started last year by rival Tesla has left many carmakers struggling to sell cars they have already produced.

The company has a cash flow break-even target for 2025 which it risks not meeting due to the tariffs and price war, but said it hopes its planned actions will help mitigate such problems.

On Tuesday it posted a first-quarter operating loss of $231.7m (R4.30bn) while revenue plunged to $345.3m (R6.40bn) from $543.4m (R10.07bn) a year earlier.

In its quarterly report, the carmaker said its results had been hit by lower sales and higher discounts.