Polestar shuts stores in China, exits EV sales joint venture
Polestar reported 76 per cent growth in first-quarter sales earlier this week
Electric vehicle brand Polestar is scaling back its presence in China, running down its store network and exiting a sales and marketing joint venture with a local company.
Polestar Chief Executive Officer Michael Lohscheller said the Swedish-origin carmaker, which is part of billionaire Li Shufu’s auto empire, has decided on a different set up in the world’s largest vehicle market.
“It’s quite normal that we have different setups in different markets and of course, the Chinese market is competitive,” Lohscheller said in an interview, adding that Polestar is still committed to China and sees long-term opportunities there as a brand.
Although Polestar earlier this week reported 76 per cent growth in first-quarter sales, the company had a rough 2024 marked by disappointing uptake of its Polestar 3 and 4 models and postponed a cash-flow breakeven target by two years. Its shares have been hovering around $1 for nearly 12 months.
In China, it faces intense competition from automakers like BYD Co. There, its purchasing app now shows only 10 locations available to arrange a test drive, compared with its China website, which still shows 36 stores.
Asked whether Polestar is moving resources away from China, Lohscheller said it was important to “realize Polestar is still a young company. We obviously have limited resources. We see a lot of growth in in Europe.”
On Thursday, Polestar said in an exchange filing that it has exited a joint venture with Hubei Xingji Meizu Group Co. The termination is a result of a change in market focus and strategy, according to the filing. The venture was in charge of sales, customer service and other commercial activities for Polestar China.
Despite China being the largest market in the world for EVs, Polestar only sold about 3,120 passenger cars there last year, according to data from the China Automotive Technology and Research Center, a fraction of the around 44,850 it shipped globally.
“We are committed to the Chinese market, but we need to prioritize certain markets,” Lohscheller said. He listed the UK and France as two other geographies where sales are growing. “So obviously we prioritise certain things.”
