Polestar, the premium electric vehicle brand, is reportedly preparing to completely withdraw from the Chinese market by the end of this year, according to Chinese media NBD Auto. This development comes amid dismal sales figures and significant organisational restructuring in the region.

The Swedish-Chinese automaker sold 69 vehicles in China during the first half of 2025, with monthly sales dropping to zero in both April and May. This stands in stark contrast to Polestar’s global performance, where it delivered 30,300 vehicles in the same period, representing a 51% year-over-year increase.

Signs of the company’s retreat have been mounting. Polestar’s joint venture with Star Meizu, Polestar Times Technology (China) Co., Ltd., ceased operations in April. The company has also undergone significant management changes, with China CEO Wu Huijing recently departing and being replaced by Hu Shiwen as the legal representative of Polestar Automobile Sales Co., Ltd.

Currently, Polestar maintains just one direct sales store in China, which is in Shanghai. The online purchasing system has been shut down, and test drives require telephone appointments, suggesting near-complete operational suspension in the market.

These developments reflect Polestar’s dire financial situation. The company reported negative net assets of 3.329 billion USD at the end of 2024, with total liabilities of 7.383 billion USD against 4.054 billion USD in assets. Polestar has accumulated losses exceeding 5.1 billion USD since 2020, with 2024 alone accounting for 2 billion USD in net losses.

In June, PSD Investment Limited, a major investor in Geely Holding Group controlled by Chairman Li Shufu, provided an emergency 200 million USD cash injection to Polestar. This transaction increased Li Shufu’s combined ownership in Polestar to 66%, while Volvo‘s stake decreased from 18% to 16%.

Despite this financial support, industry analysts quoted by NBD Auto question whether the cash infusion will be sufficient to address Polestar’s financial challenges, especially as the company aims to achieve profitability by 2025 amid intense global competition in the electric vehicle market.

Since its NASDAQ listing in 2022, Polestar’s stock price has plummeted by 90%, even receiving a compliance notice from NASDAQ after falling below $1 per share in 2024.