It's hard to sell cars in China. So now Polestar is significantly scaling back in its home country to focus on Europe and the US. Two out of three dealerships are closing.
According to several news media and information from Polestar's own app, the number of the brand's dealers is decreasing in China.
Previously, there were 36 so-called Polestar Spaces registered around China. Now, the app where you can book test drives shows that there are 10 locations left.
Polestar has also started a process to withdraw support from several of the places the brand has sold its cars from. The goal is to 'reprioritize'.
The significant cuts come just a month after previous rumors of changes at Polestar.
At the time, Polestar officially denied that a major restructuring was underway in China.
Polestar CEO Michael Lohscheller insists on a different explanation, stressing that the brand is now choosing to "prioritize certain markets."
He maintains that the car brand is 'not completely withdrawing' from China.
Strong competition pressures Polestar in China
However, it is difficult to ignore the challenges Polestar faces in China. The brand is one of those that feels the pressure from competitors the most, even with the Geely Group's gigantic cash tank at its back.
Domestic Chinese brands such as BYD, Geely's own brands, Li, Xpeng and most recently Xiaomi dominate the sales charts.
In all of 2024, Polestar only managed to sell 3,120 cars at home in China. In comparison, a total of 12.9 million so-called New Energy Vehicles (NEVs) were sold in the country during the same period.
However, NEV cars also include hybrid cars. Polestar has not built one like this with its Polestar 1, which went out of production in 2022 after 1,500 units.
China accounted for only 7 percent of Polestar's total global sales in 2024.
It paints a harsh reality for car brands with a European background. China's electric car market is no longer so welcoming to "import" brands, even though Polestar produces cars in China and is owned by Chinese Geely.
Local Chinese manufacturers, on the other hand, seem to appeal more to Chinese drivers. They build electric cars both faster and cheaper than many foreign competitors.
Their cars are also often packed with technology tailored to Chinese consumers, something that doesn't necessarily go down well in other markets.
Global comeback and new focus areas
Polestar's operating and design DNA is primarily European. The brand also occupies a special position within the Geely Group.
Its cars are reminiscent of other Geely brands like Zeekr, which are doing significantly better in the Chinese domestic market. Furthermore, Volvo chose to divest itself of the brand last year.
Overall, 2024 was a challenging year for Polestar globally. Sales slowed down and profit margins were under pressure.
Tariff barriers and ever-increasing competition only make matters worse. In the US, for example, the Polestar 2 has completely disappeared because it is only built in China.
However, the first quarter of 2025 has shown positive trends for the brand on a global level. Sales experienced a significant increase with an increase of 76 percent worldwide. Here at home, progress can also be seen. Read more about it here.
With the very small share of sales in China, it seems logical that Polestar is now looking for growth elsewhere. Michael Lohscheller has specifically pointed to the UK and France as markets that are now given higher priority than others.
The question is whether that is enough. For the time being, you can at least save some money by making yourself less noticeable at home in China.
