Polestar Is Bracing for the EV Tariff Wars. It May Not Emerge Unscathed

Polestar is caught successful the mediate of an planetary commercialized war. Growing contention from Tesla and Chinese rivals and the slowdown of the planetary EV marketplace are not large for business. Even worse are the gigantic taxes acceptable to beryllium imposed connected Polestar’s full cohort of Chinese-manufactured cars. The US authorities volition raise tariffs connected electrical vehicles coming from China from 25 percent to 100 percent, and successful Europe, the menace of a 38 percent hike successful taxes besides looms from July 4. In May, China suggested that it volition retaliate with a 25 percent tariff hike connected large-engine cars should the US spell ahead.

For rivals including Rivian, the Saudi-backed Lucid, and Tesla, a marketplace slowdown is atrocious news. But for New York–listed Polestar, whose mainstay, the Polestar 2, is manufactured wholly successful China, this could beryllium devastating. The Swedish-founded institution confirmed to WIRED that it believes its electrical hatchback, whose price starts astatine $79,900, volition decidedly beryllium affected erstwhile these tariffs travel into play. Polestar told WIRED it is presently “digesting the authorities and its options” pursuing the news.

The company—which is recovering from an ownership and absorption restructure, a round of occupation cuts, disappointing income results, and a lackluster equilibrium expanse for 2023—faces an uphill conflict to turn its concern and wage backmost its loans.

So acold determination is nary publically announced program to safeguard the Polestar 2, the company’s tentpole EV which makes up the immense bulk of its sales. Already, the Polestar 2 is much than $29,000 much costly than the Tesla Model 3 (which is produced successful Shanghai, and starts astatine astir $50,600), and is much costly than the $77,400 Lucid Air Pure and the $75,900 starting constituent connected the Rivian R1S, each of which vie successful the aforesaid category.

Polestar declined to remark connected however severely the tariffs volition interaction the terms of its vehicles. But the institution has a program that could assistance its aboriginal models: It says it volition travel done connected its 2021 plans to manufacture the Polestar 3 successful South Carolina, portion the Polestar 4 volition beryllium manufactured successful South Korea from the 2nd fractional of 2025. (The Polestar 4 is already disposable successful China and is currently discounted there, but won’t scope Europe until aboriginal this year.)

Andy Palmer, erstwhile COO of Nissan and CEO of Aston Martin Lagonda, who has 4 decades of acquisition successful the automotive industry, says that Polestar is “far from retired of the woods,” adjacent if it is capable to navigate its mode done these tariffs, which are besides acceptable to interaction EV batteries. “Strict currency absorption volition beryllium the bid of the time until astatine slightest we spot maturation successful EV adoption toward antecedently expected demand,” helium says.

Polestar’s latest income results, released connected Tuesday, authorities that it has delivered 20,200 cars truthful acold successful 2024, mostly successful the 2nd 4th of the year. Only 200 of those cars were Polestar 4s, the institution told investors. Overall, these figures are a marked betterment connected its preliminary Q1 results, which showed that income of the Polestar 2 had dropped by 40 percent from the aforesaid play the twelvemonth earlier with conscionable implicit 7,200 vehicles sold successful the archetypal 3 months of 2024, its weakest effect since the 3rd 4th of 2022. Polestar CEO Thomas Ingenlath said successful a connection that the institution was showing “strong momentum,” and that helium expects beardown gross betterment successful the 2nd 4th of the year.