Polestar announces Polestar 7 SUV amid falling trade and regulatory hurdles

Polestar could face a possible ban in the United States, but the Swedish manufacturer via China won’t let that stop it from launching new products. The company provided an update on Thursday, during which it announced a new model, the Polestar 7 compact SUV, which will be produced in Europe.

Little has been revealed about the Polestar 7 – we haven’t even taken a look at a prototype – but the company has said it will be a “very progressive SUV” with “a USP strong”, or a unique selling point. It is unclear when the vehicle will enter production or even where in Europe it will be built. (Sweden seems like a likely bet.)

“We are going to enter the compact SUV segment, by the way, the largest and fastest growing segment in the world, and we will obviously make sure that it has all the Polestar DNA” , said the company’s new CEO, Michael Lohscheller.

The update, which took the form of a professional interview with Lohscheller, did not address Polestar’s regulatory issues in the United States. The Biden administration recently finalized a ban on connected vehicle software from China, a move that Polestar said would “effectively prohibit” it from selling electric vehicles in the United States.

In fact, the United States wasn’t mentioned at all during the 27-minute video — perhaps due to the strong headwinds electric vehicles face under the new Trump administration. Instead, the company said it plans to launch soon in France, which is one of the fastest-growing markets for electric vehicles.

This represents a significant change in the company’s position compared to recent years. Polestar has focused on the U.S. market with the Polestar 3, a three-row SUV manufactured at its South Carolina factory to qualify for generous incentives under the Biden administration. Electric vehicle sales seemed strong when the Polestar 3 was announced, but they have now slowed due to high prices, charging issues and politics. Many of these incentives put in place by President Joe Biden will likely be removed under President-elect Donald Trump.

In a statement, Polestar said it was adapting its operations to comply with the new regulations. “The United States is and will remain an important market for Polestar and we always ensure that our cars comply with the regulations of the countries in which we operate,” said Michael Ofiara, Polestar spokesperson. “The now finalized legislation is expected to be implemented with model year 2027. We are at an advanced stage to adapt our future models to ensure they comply with regulations in terms of hardware, software and suppliers . Therefore, we will ensure that we comply with all regulations.

Polestar also reported its third-quarter results today (the company lags behind other companies in reporting earnings), including a net loss of $323 million. It sold 12,548 cars, down 8% from its third-quarter 2023 sales.

The company also said it no longer expects revenue in 2024 similar to 2023, nor a positive gross profit margin for the fourth quarter. Instead, Polestar expects “a revenue decline of approximately 15% and a negative gross margin at approximately the same level as for the full year 2023, as the mix produces fourth quarter was negatively impacted by lower than expected sales of Polestar 3 and Polestar 4.”

But amid these challenges, Lohscheller said he’s confident Polestar is still on the right track. It predicted “positive” 2025 adjusted earnings and free cash flow, in which Polestar would generate more money from its business operations than it would lose in 2027.

“Really, 2024 is a transition year for Polestar,” said Lohscheller, who was previously CEO of Stellantis-owned Opel. “But I think we are now well positioned for 2025, with the right cars, with the right distribution, and obviously with a much better focus on significant cost reduction and increased efficiency.”

Updated January 16: Updated to include a statement from a Polestar spokesperson.