Polestar Proposes 'Reverse Split' to Maintain Nasdaq Listing

Polestar expanded its losses in the third quarter to $365 million, compared to $323 million recorded a year earlier, the company reported on Wednesday.

The Swedish electric vehicle manufacturer, predominantly controlled by the Chinese group Geely and chaired by Li Shufu, also announced a reverse stock split to maintain its presence on the Nasdaq, following a market warning for trading below the minimum threshold of one dollar.

The announcement led to a drop of up to 17% in Polestar's shares during the opening session in New York.

The company's Chief Financial Officer, Jean-François Mady, described the quarterly results as "clearly disappointing" and attributed the losses to increased production costs due to US tariffs and pricing pressures in the electric vehicle market.

The company was also impacted by costs associated with residual value guarantees in North America, a common mechanism in leasing contracts that requires covering the difference when the resale value of vehicles falls below expectations.

Although quarterly revenues increased by 36%, margin pressures, accumulated debts, and growing competition have weighed down the manufacturer's results, which has lost more than 93% of its market value since going public in 2022.

In an effort to cut costs, Polestar has reduced its workforce by about 20%—around 500 employees—and has eliminated hundreds of positions in research and development, strengthening its technological and operational reliance on Geely.

The company has also adopted a dealership-focused distribution model and has turned its attention to Europe, which now accounts for 75% of its revenues, compared to 11% from the United States.

During the presentation of the Polestar 5 GT in September, the company announced that it would not launch this model in the United States or China, the world's two largest automotive markets.