EV maker Polestar’s quarterly loss widens as tariffs, pricing pressure weigh on margins

By Harshita Mary Varghese and Marie Mannes

May 7 (Reuters) – Sweden’s Polestar reported a bigger first-quarter loss on Thursday, as pricing pressure and U.S. tariffs offset stronger sales, sending its shares ​plunging nearly 8%.

Polestar, majority-owned by China’s Geely Holding, has ‌rolled out discounts to attract cautious buyers as U.S. tariffs compress margins and raise manufacturing costs.

Despite a strategy focused on Europe, which accounted for 78% of its sales and led to a 7% increase in sales during the January-March period, ‌its ​net loss widened to $383 million in the first ⁠quarter from $166 million a ⁠year ago.

“The world around us continues to throw up challenges. This is reflected in our results for the first quarter,” Polestar CEO Michael Lohscheller said on a call to analysts, providing no financial ​outlook for the year.

Revenue was broadly flat at $633 million as it sold fewer higher-priced Polestar 3 models and a greater share ⁠of Polestar 4 cars, which accounted for ⁠9% and 67%, respectively, in the quarter.

To save on ​costs, Polestar has opted to roll out refreshed versions of aging models ​rather than launching all-new ones. It expects deliveries of ‌a new Polestar 4 variant to begin later this year, followed by a refreshed version of the sedan Polestar 2 in 2027. The automaker’s next fully new model comes in the form of the compact ⁠Polestar 7 SUV thereafter.

Like many EV startups, Polestar is burning cash to expand its line-up and has in recent months secured loan and equity funding ⁠from Geely and ‌banks, while Volvo Cars is converting debt into ⁠equity. Polestar also secured approval for a 50 million ​euro ‌addition to its green trade finance facility.

Its cash ​position was $676 ⁠million at the end of the first quarter, down from $1.16 billion three months earlier.

First-quarter expenses also rose on higher sales commissions, one-off personnel costs and marketing.

The company expects to publish its second-quarter sales on July 9.

(Reporting by Harshita Mary Varghese in Bengaluru and Marie Mannes in Stockholm; Editing ​by Maju Samuel)