Source: Polestar

If Polestar’s reduction of its retail footprint across China is any indication, it may be gradually withdrawing from the Chinese market to focus Europe and the United States.

Based insurance registrations, the company only delivered 3,110 EVs in China in 2024 and 166 through the first three months of 2025.

Poor sales performance continues to fuel speculation about its a potential China exit, especially as Polestar has significantly reduced its local presence, cutting the number of stores from 36 to 10.

The company has also terminated some partnerships with local dealerships, contradicting its previous statement that it had no plans to alter its business structure in China.

CEO Michael Lohscheller clarified that this is not a complete withdrawal but rather a reprioritization of business operations.

However, Polestar faces stiff competition from domestic Chinese brands and is generally regarded as lacking in differentiation compared to other brands under the same parent company, such as Zeekr.

Polestar sales in China have reached its lowest point, selling only 1 vehicle in March and 6 in February 2025.

Virtually all of its sales were to global markets, having exported a cumulative total of over 6,000 units as of March 2025. Last year, Polestar China exported 42,371 EVs while selling only 1,726 cars locally.

China remains the world's largest market for new energy vehicles, with 12.9 million units sold in 2024, primarily dominated by domestic brands like BYD and Li Auto.

Domestic new energy brands have gained an edge over legacy auto by offering fast, cost-effective vehicles tailored to Chinese consumers’ preferences, whereas Polestar’s Scandinavian minimalist design and European-centric operations have limited its appeal.

Despite a 76% increase in global sales in the first quarter of 2025, Polestar’s sales in China accounted for only 7% of it. As a result, the company plans to focus on stronger-performing regions such as the UK, France, and the US.

In particular, Polestar aims to expand its US presence by leveraging Volvo’s sales network, increasing its store count from 35 to 60. To facilitate this expansion, Polestar has made several adjustments in China.

On April 15, it announced the termination of its joint venture with Xingji Meizu, reclaiming distribution rights in China, signaling a gradual exit from the market.

Local research and development efforts have nearly halted, and the launch schedule for new models remains uncertain.

Source: Polestar

The Polestar 4, introduced last year, is currently the brand’s main offering, while plans to produce the Polestar 5 in Chongqing remain unclear.

Production is being relocated due to high tariffs on Chinese-made vehicles exported to Europe and the US. The closure of the Chengdu factory, the discontinuation of Polestar 4 production, and the shift to manufacturing in South Korea and the US indicate a substantial reduction in its Chinese operations.

Polestar was originally a premium EV brand under Volvo, which invested over $1 billion in the company. However, in February 2024, Volvo reduced its stake from 48% to 18% to focus on its own restructuring, making Geely Holding the largest shareholder.

Geely’s recent moves suggest a broader restructuring of its portfolio. Since 2024, Geely has launched the Galaxy series, merged Zeekr and Lynk & Co, and divested inefficient assets like Jiyue (a joint venture with Baidu), concentrating resources on mid-to-high-end EVs under Zeekr and mass-market models under Galaxy.