Polestar Eyes Growth Despite Tariffs, Unveils New Business Plan

Amidst the ongoing tariff debate, Polestar, the electric vehicle (EV) arm of Chinese automaker Geely, is navigating challenges while pursuing ambitious expansion plans.

Tariff Impacts

The 10% tariffs imposed by the US on goods from China have affected Polestar, particularly the assembly of its popular Polestar 2 EV in China. The tariffs have also increased the cost of components and raw materials used in vehicle production.

Localized Production

To mitigate the impact of tariffs, Polestar is accelerating the production of its Polestar 3 SUV in South Carolina, USA. This plant is shared with Volvo, another Geely-owned company. Local manufacturing exempts Polestar from tariffs and reduces assembly and transport costs.

Global Footprint

Despite its localized production strategy, Polestar's manufacturing footprint remains complex. The upcoming Polestar 4 sports SUV will be built in South Korea, while the Polestar 5 sports sedan will be produced in Europe, potentially exposing it to tariffs.

Financial Outlook

Despite the challenges, Polestar forecasts strong growth in revenue, targeting a 30-35% increase in 2023. The company aims for positive EBITDA by 2025, supported by portfolio expansion and increased production efficiency.

Polestar 7

Polestar has unveiled its latest addition to the lineup, the Polestar 7 compact SUV. This new model targets the fast-growing compact SUV segment and is expected to launch in 2027 with a price point in the mid-$40,000 range.

Conclusion

Polestar's ability to adapt to tariff challenges and execute its business plan will be crucial for its continued growth. By localizing production, expanding its global footprint, and diversifying its product offerings, the company aims to establish a strong foothold in the competitive EV market.