Polestar plans production in Europe: Response to EU tariffs

Production Polestar wants to produce in Europe

2025-01-29 Source: dpa 2 min Reading Time

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After the EU imposes import duties on cars from China, Polestar wants to produce in Europe. Meanwhile, the Geely subsidiary has a problem in the USA.

Polestar 3 during final assembly at the manufacturer's US plant.(Image: Polestar) — Polestar 3 during final assembly at the manufacturer's US plant.
(Image: Polestar)

The Chinese-owned Polestar plans to manufacture cars in Europe for the first time. The new model Polestar 7 from the Swedish company is to be produced on its home continent, Polestar CEO Michael Lohscheller told the news agencies dpa-AFX and dpa.

"The costs are significantly lower than shipping cars around the world," explained the former Opel boss. "It also gives us protection against tariffs." Last year, the EU introduced punitive tariffs on electric cars produced in China.

No date yet for European production

So far, Polestar produces in Asia, mainly in Chinese factories, and in the USA with Volvo. According to Lohscheller, it is not yet clear where exactly and with which partner the new car, planned as an SUV, will be built in Europe, and the market launch date has also not been set.

The manager wants to put the business in Europe on a broader footing, including in Germany and France. So far, the automaker sells its cars primarily through online orders and then delivers through its few showrooms. In the future, Polestar cars will also be available for purchase at about 300 dealers worldwide.

Sales decline 2024

The electric car manufacturer experienced a dry spell, both in sales and financially. In 2024, nearly 45,000 cars went to customers, 15 percent less than the previous year. According to Lohscheller, deliveries are expected to grow by an average of 30 to 35 percent annually by 2027. This year, he aims to reach breakeven on the adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda).

Polestar underwent a drastic overhaul and massively cut jobs, with about 600 out of previously 3,100 employees having to leave. By 2027, the company aims to stand on its own financially and be able to cover investments independently.

Revenue from the sale of CO₂ certificates is also expected to contribute to the business. Lohscheller anticipates revenues in the triple-digit million range from this this year.

Uncertain prospects in the US market

In the USA, Polestar currently faces an issue. The US government decided this week that starting with the model year 2027, no connected cars from manufacturers under Chinese control will be allowed to be sold. This also applies to vehicles produced in the USA. Although Polestar builds cars in the US state of South Carolina, the majority is held by the Chinese Geely Group and its founder Li Shufu. "We will find solutions," said Lohscheller. The USA is an important market, and there is still time.

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Date: 08.12.2025

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