Swedish electric vehicle (EV) maker Polestar has denied reports that it is withdrawing from the Chinese market, despite ongoing restructuring efforts and workforce reductions.
The company affirmed that its joint venture with Meizu remains operational and stated that customer services and shareholder support remain unaffected.
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Local media reports indicate that Polestar Technologyâs Nanjing headquarters has been undergoing substantial downsizing since February. Senior executives and employees are expected to depart by mid-March, while approximately 50 staff members in sales and operations were reportedly laid off after the Lunar New Year, with compensation provided.
Polestar China has assumed responsibility for transition management in Shanghai, where a small team remains in place to oversee brand reputation and after-sales services.
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Polestar has experienced declining sales in China, mirroring its global performance. The company reported a 15% decline in worldwide sales to 44,900 units in 2024, while its Chinese market performance has steadily weakened since 2021.
Production of the Polestar 4, previously manufactured at the Hangzhou Bay plant, ended in early 2024 due to sluggish demand, with the final batch produced between December 2023 and March 2024. The company currently sells the Polestar 2, 3, and 4 in China, with prices ranging from 299,800 to 798,000 yuan ($41,000 to $100,000).
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To navigate market challenges, Polestar is shifting production overseas. In a move to mitigate tariffs on Chinese-made vehicles, the Polestar 4 will be produced in South Korea starting in late 2025, while the upcoming Polestar 7 will be manufactured in Europe. These strategic adjustments reflect the companyâs broader global approach amid intensifying competition and evolving geopolitical trade conditions.
Polestar Technology was launched in June 2023 with around 200 former Polestar China employees to strengthen the brandâs local presence. However, the entity has faced challenges due to unclear strategic positioning and limited local decision-making authority. While Polestarâs models continue to debut in China, key business decisions remain under Swedish management, potentially limiting the companyâs ability to adapt to the rapidly changing Chinese EV market.
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Despite recent setbacks, Polestar maintains its commitment to the Chinese market. In January 2025, the company announced a plan targeting 30% to 35% annual retail sales growth between 2025 and 2027, with a goal of reaching profitability in 2025. The company has expressed confidence in its future, highlighting 2025 as a potential milestone year.
As competition intensifies and market dynamics shift, Polestarâs ability to reposition itself in China remains uncertain. However, the companyâs restructuring efforts and strategic adaptations suggest a continued focus on maintaining a presence in the worldâs largest EV market.
Source:Â Autohome