Geely-owned electric vehicle (EV) maker Polestar has reported a net loss in the second quarter (Q2), reaching $1.02bn, from the $268m recorded in the same period last year.
The Swedish EV maker attributes this downturn to a $739m non-cash impairment charge on its Polestar 3 sport utility vehicle, driven by higher US import tariffs and a slowdown in EV demand.
Despite the financial headwinds, Polestar's quarterly revenue saw an uplift, with a 36.6% rise to $791m.
Looking at the first half (H1) of 2025, Polestar saw an increase in retail sales volumes, which surged by 51.1% due to a shift to an active selling model, an expanded retail network, and an updated range of models.
This led to a significant revenue boost, with a 56.5% increase to $1.42bn, propelled by the higher sales volumes.
However, the gross margin was severely affected by the Q2 impairment expense, reporting at 49.4%.
The net loss for the H1 of the year stood at $1.19bn, primarily due to the impairment expense.
Polestar's cash position was $719m as of the end of June 2025.
Following the retraction of its 2025 financial forecast earlier in the year, Polestar has opted not to publish any new guidance at present.
Nonetheless, the company maintains its target for up to 35% compound annual growth rate in retail sales volumes through 2025 to 2027.
The company is in the process of evaluating the repercussions of international tariffs, policy alterations, and the changing market landscape on its business operations and geographic strategy.
In the meantime, Polestar is seeking to fortify its collaboration with Volvo Cars.
Polestar CEO Michael Lohscheller said: "Our operational performance in the first half of 2025 reaffirms that we are doing the right things, in a difficult market: increasing our commercial footprint, selling more cars and relentlessly focusing on cost and inventory management.
"The launch of Polestar 5, our four-seat Grand Tourer, at IAA in September will strengthen our position as the leading performance EV brand."
Polestar announced in June that it had received a $200m equity investment from PSD Investment, overseen by Eric Li, Geely Holding Group's founder and chairman.
Subsequently, in July, Polestar entered into a memorandum of understanding with Volvo Cars to begin production of the Polestar 7 in Kosice, Slovakia, ahead of its anticipated launch of the premium compact SUV in 2028.
Volvo Cars, which is responsible for producing the Polestar 3 in South Carolina, US, also recorded a comparable impairment charge in Q2 for its ES90 and EX90 models, citing the same reasons of tariffs and delayed product launches.
