Polestar Waves The White Flag In China

After selling just 3,120 cars in China last year, Polestar says that it is refocusing efforts to prioritize other markets.

666124_20230418_Polestar_4

Photo by: Polestar

Rob Stumpf

By: Rob Stumpf

Apr 11, 2025 at 3:19pm ET

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Polestar is reducing its sales footprint in China by two-thirds.
China made up just 7% of the brand's sales in 2024.
The automaker will focus on growing its footprint in European countries that show more promise.

Electric starup Polestar may be seeing a bit of a resurgence this year, but it's also pumping the brakes hard in the world's largest EV market.

Polestar has quietly gutted two-thirds of its stores in China and has begun to pull the plug on its joint sales operation in order to refocus its priorities, according to Bloomberg and other news reports. The Volvo cousin, which is owned by China's Geely Group, appears to have downsized from 36 stores across the entirety of China to just 10, according to locations now showing in the Polestar purchasing app, where prospective owners can arrange a test drive.

This comes just a month after Polestar dispelled rumors that it was restructuring in the country.

2026 Polestar 2 (Europe Spec)

Photo by: Polestar

This isn't technically a full exit for Polestar in China. Officially, Polestar's CEO Michael Lohscheller insists the brand is making moves to "prioritize certain markets" and has not abandoned China. But it's hard not to notice that Polestar is one of the brands getting chewed up and spit out by fierce local competition.

In 2024, Polestar sold just 3,120 cars in China. Keep in mind that a total of 12.9 million New Energy Vehicles were sold in the country during the same time, mostly concentrated in heavy-hitting domestic brands like BYD, Geely, Li, Xpeng and Xiaomi. (Polestar is also in an unusual place because it's so similar to other Geely brands that do well in China, like Zeekr.)

All of this underlines a brutal reality: China's EV market is no longer a welcoming place for "import" brands. While Polestar makes the Polestar 2 in China and is Geely-owned, its operations are European. Meanwhile, in China, local players have figured out how to build EVs faster and cheaper than imports, plus they're loaded with tech specifically catered towards the market that even the most minimalist, Scandinavian-styled car can't meet.

And to be fair, Polestar did have a rough go in 2024. Sales have slowed, margins are tight, tariffs are aplenty and competition is growing at a rate faster than ever in just about every segment. The first quarter of 2025 showed a significant rebound with a 76% uptick in global sales, but with China representing just 7% of Polestar's 2024 sales, it's no surprise that the automaker wants to expand its horizons in markets where it performs better. Lohscheller specifically named the UK and France as two of those locations.

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The brand also previously identified growth opportunities in the U.S. Late last year, Polestar committed to growing its sales network by 75%—from 35 to nearly 60 locations—in the States. It later noted that this would be accomplished by tapping the existing Volvo dealer network, which could add notoriety to the brand by leveraging Volvo's existing customer base.

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Polestar now has to focus on fighting smarter outside of China. The brand needs to build its identity and recognition across Europe and the U.S. to make up for the lost sales volume. That means continuing to grow sales of the Polestar 3 and Polestar 4 globally and convincing folks that they need a Polestar rather than a Volvo, Cadillac, or Tesla. With any luck, it can find its footing elsewhere.

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