Swedish electric-vehicle maker Polestar on Wednesday paused its 2025 outlook, citing rising uncertainty over U.S. tariffs that could impact supply chains and vehicle prices. The move sent shares of the U.S.-listed company down 6%.
Although Polestar reported strong first-quarter sales earlier this month, CEO Michael Lohscheller cautioned that shifting American trade policy posed a growing risk. “We are responding to an increasingly volatile trade environment,” Lohscheller said, as the company works to reduce reliance on China by expanding production in the U.S. and Europe.
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U.S. President Donald Trump’s new tariffs—levies of at least 145% on Chinese imports—have prompted several automakers, including Stellantis, General Motors, and Volvo Cars, to suspend forecasts or warn of profitability headwinds. In response to industry concerns, Trump on Tuesday signed an executive order introducing a credit-based mechanism to offset some tariff costs on parts and materials.
Polestar manufactures the Polestar 3 crossover SUV at its South Carolina facility, shielding that model from direct tariff exposure. However, the Polestar 4, which will be produced in South Korea and exported to the U.S. later this year, remains vulnerable to new trade restrictions.
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Despite the geopolitical uncertainty, Polestar expects compounded annual growth in vehicle sales of 30% to 35% over the next two years and improved gross margins through 2025. Targeted discounts for Tesla customers have helped the brand gain traction in the U.S., even as broader fears of a recession dampen consumer sentiment.
Polestar also disclosed another delay in its financial reporting. The company filed notice with the U.S. Securities and Exchange Commission to postpone the release of its 2024 annual report until May 14. The company’s fourth-quarter results, already delayed from March to April, have yet to be published—raising investor concerns about accounting practices. Previous issues with financial disclosures led Polestar to restate earlier financial results.
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In parallel, Volvo Cars CEO Hakan Samuelsson this week signaled potential collaboration with Polestar at its upcoming plant in Slovakia, highlighting deeper ties with Chinese parent company Geely. “Of course Polestar, who are also having cars in the pipeline. So that’s something we’re looking into,” Samuelsson said. Such collaboration could help Polestar reduce manufacturing costs as it competes with rivals like Tesla and seeks to scale production amid tightening cash flow.
Volvo has reduced its stake in Polestar and ended direct financial support, a decision that raised concerns about Polestar’s long-term liquidity and expansion capability.