POLESTAR

Polestar and its struggle to avoid drowning

Polestar, which launches new electric models at an enviable pace, is going through a complicated period. Its shares are well below one dollar, and rules are forcing Nasdaq to ban it.

Despite continuously launching new models, most of them packed with features capable of exciting customers and increasing sales volume, Polestar continues to lag behind in terms of its stock market value. This is to the despair of investors and Geely, the Chinese group that owns a number of other Chinese brands, in addition to also controlling Volvo and Lotus, plus 50% of Smart and practically 10% of Mercedes, of which it is the largest individual shareholder. After being represented only by the Polestar 2 for a few years, this Swedish brand, which produces its models in China, expanded manufacturing to the USA, South Korea and, from 2028, Europe, where it will start producing the 7, after having already strengthened its range with the 3, 4, 5 and 6. But even so, the brand did not avoid the threat of being removed from the American Nasdaq, the stock exchange where it is listed.

The more robust and varied range resulted in increased sales and revenue. However, it fell short of expectations. This explains why the value of the shares continues to fall, having been quoted at closing time last Friday(14/11) at just US$0.21, to which the announcement of net losses of US$1.56 billion in the 3rd quarter certainly contributed, worse than the 867 million recorded in the same period of 2024. Uninspiring results, although the brand's sales rose 36.5% in the 3rd quarter and revenue soared 48.8%, thanks to the sale of carbon credits and larger and more expensive models.

Polestar has been trading below one dollar per share since March 2023 (at $0.93) and while it started 2025 trading shares at $0.29, it closed on Friday(14/11) at $0.21, which is an additional problem for the manufacturer and shareholders, as Nasdaq cannot keep companies consistently trading below one dollar. That's why the manufacturer has already received advance notice, which prompted the announcement of a share concentration, exchanging 30 shares for just one, which should happen later this year.

This maneuver, common in companies going through value crises and called a reverse split, should raise the bar, which is currently at R$ 0.21/share, to around R$ 6.30, giving Polestar some room to maneuver, but none of this will be enough if the difficulties are not resolved. Polestar's capital is distributed among small shareholders (18%), Geely (22%), and Li Shufu (44%), the man who runs Geely. Volvo, which a year ago controlled 78.7% of Polestar, is now reduced to 16% (it sold its shares to other shareholders), as its poor performance was compromising Volvo's valuation.

Autonews