Polestar reported a wider loss for the third quarter on Wednesday and announced plans to carry out a reverse stock split to maintain compliance with Nasdaq listing requirements, after its shares fell below the minimum $1 threshold.
The electric vehicle maker, majority-owned by China’s Geely Holding and chaired by Li Shufu, saw its stock drop as much as 17% in early New York trading following the announcement. The company posted a net loss of $365 million for the quarter, compared with a $323 million loss in the same period a year earlier.
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Polestar’s shares have been pressured by a combination of U.S. tariffs, model delays, mounting debt, and intensifying competition. The reverse stock split is designed to consolidate the company’s shares, reducing their number but increasing their per-share price to bring it back above the $1 level required by Nasdaq.
The company said its third-quarter results were affected by pricing pressure and higher production costs, partly due to import duties. While revenue rose 36% year-on-year, Polestar faced increased costs from residual value guarantees in North America—commitments to cover depreciation shortfalls on leased electric vehicles as used EV prices continue to fall.
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Polestar has implemented significant workforce reductions, cutting around 20% of its 2,500 employees this year, including hundreds of positions in research and development. The company plans to rely more heavily on Geely’s engineering resources and has shifted to a dealer-focused sales model to reduce operational expenses.
In an effort to rebalance its market exposure, Polestar is focusing more on Europe as demand in the United States weakens, with consumers increasingly favoring hybrids and gasoline-powered cars. When it unveiled the Polestar 5 GT in September, the automaker confirmed it would not launch the model in the U.S. or China, two of the world’s largest car markets.
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Polestar’s stock has fallen more than 93% since its 2022 market debut, and the company has faced challenges meeting debt covenant requirements, forcing it to negotiate amendments with lenders. The automaker continues to seek financial stability amid a highly competitive electric vehicle market and shifting consumer demand.