Polestar has always been one of those businesses that strangely occupies the periphery of the electric vehicle discourse. Not quite BYD, not quite Rivian, not quite Tesla, but somehow incorporating elements of all three. You can sense the confusion when you walk into a Polestar showroom in Shanghai or Oslo. The cars have a Scandinavian aesthetic, with muted interiors and clean lines that seem almost purposefully out of style. However, the majority of the internal components were constructed in China. More than any earnings number, this contradiction is likely what keeps investors unsure of what they’re really getting when they purchase PSNY.
The dispute was not resolved by the 2025 figures. In any other industry, revenue would be reason for celebration as it surpassed $3 billion, a 50% increase from the previous year. However, more than a billion dollars in impairment charges caused the net loss to increase to almost $2.4 billion. It is the type of split-screen result that prevents the stock from being neatly categorized. Despite investors’ apparent belief that something is changing beneath the surface, the shares have plummeted, down about 44% in the last 12 months, according to MarketWatch data.
As this develops, it seems as though Polestar is being punished more for the timing of its actions than for what it is doing. The timing has been terrible. The domestic EV market in China is in the midst of a price war that most Western automakers still don’t seem to fully understand, with smaller players being quietly eliminated by consolidation. The fact that Polestar is trapped in the center of it is either a curse or, depending on how you squint, a peculiar kind of advantage. The business has a firsthand look at how BYD, Nio, and XPeng are challenging Detroit’s cost structures.
The aspect of this narrative that merits greater attention than it typically receives is the asset-light strategy. Polestar does not construct its own manufacturing facilities. Because it borrows capacity from Volvo and Geely, it is able to grow without incurring as much capital expenditure as Rivian. The model isn’t flawless. Polestar becomes reliant on partners whose interests don’t always coincide as a result. However, owning less is typically preferable to owning more during a downturn.
Low double-digit volume growth and a cautious outlook for 2026 indicate that management is fed up with being overly optimistic. With the Polestar 4 expanding into new markets and the Polestar 5 getting closer to launch, the company is also launching its largest product offensive to date. Fair value is estimated by Simply Wall St. analysts to be around $22.50, which suggests a 20% increase from current levels. That’s not a moonshot. It’s a number that suggests the market and the analysts aren’t that far apart, just cautious about the path.
It’s hard not to notice that Polestar’s story rhymes with Tesla’s in the mid-2010s — doubts about demand, questions about cash, a product lineup expanding faster than the balance sheet can comfortably absorb. The difference is that Tesla had Elon Musk and a U.S. home market. Polestar has Geely and a geopolitical complication. It remains to be seen if that turns out to be a millstone or a moat. For now, the stock trades like the market hasn’t quite made up its mind either.