Polestar is closing its U.S. sales operation under federal order, and the financial wreckage showed up clearly in its first-half 2026 results: a net loss of $842 million on revenue of $1.36 billion, with roughly $130 million of that loss traceable directly to the government’s decision.
On June 25, 2026, the U.S. Department of Commerce’s Bureau of Industry and Security told Polestar it would not receive authorization under the Connected Vehicle Rule to sell new cars in the U.S. from model year 2027 onward. Polestar can sell through its existing inventory, then stops. The company will maintain its service network and honor warranties for existing customers, but new-vehicle sales in the American market are finished.
The BIS ruling drove a cascade of charges: residual value guarantee costs, inventory write-downs to net realizable value, and restructuring provisions covering employees, dealers, and supplier contracts. In Q2 alone, U.S. operations added approximately $170 million to the consolidated operating loss. For the full first half, that figure was approximately $211 million. Polestar flags that further negative adjustments are expected as the restructuring works through additional personnel and inventory phases.
Strip out the U.S. collapse and the headline numbers look considerably less dire than a year ago. Operating loss of $629 million improved 43% from $1.096 billion in H1 2025, though the prior-year figure was dragged down by a $724 million net impairment charge that did not repeat. Net loss of $842 million improved 29% from $1.193 billion. Revenue fell 4% from $1.423 billion, squeezed by pricing pressure, lower carbon credit sales ($57 million versus $90 million a year earlier), and the U.S. restructuring costs.
Retail sales of 30,423 cars in H1 2026 were a company record, up fractionally from 30,289 in H1 2025. Outside the U.S., sales actually grew: 28,562 cars in H1 2026 versus 27,712 in H1 2025, a 3.1% increase. Sales points excluding China grew 39.1%, reaching 235 locations globally. The company added 20 new retailer partners in the first half, bringing the total to 178.
The capital structure received a significant overhaul during the period. Polestar raised $700 million in new equity from external investors between January and March. Geely Sweden and Volvo Cars converted approximately $300 million and $340 million of outstanding loans, respectively, into Polestar equity. Volvo Cars also extended the maturity of a remaining $660 million shareholder loan from December 2028 to December 2031. Cash on hand as of June 30 was $888 million, up from $719 million at the same point in 2025.
Those moves bought time. Free cash flow burned $1.061 billion in H1 2026, against $787 million in H1 2025, driven by operating losses, interest payments, and capital investment concentrated on the Polestar 3, Polestar 4, Polestar 5, and future platforms. The company’s $950 million Club Loan remains under active renegotiation with lenders, who agreed in March to amend the debt-to-asset ratio and minimum revenue covenants through 2026.
On the product side, Polestar 4 SUV sales opened on September 2, with production ramping at its Busan, South Korea facility and first deliveries targeted for Q4. Polestar 5 deliveries to customers are described as imminent. A successor to the Polestar 2 is planned for 2027, followed by the Polestar 7 compact SUV in 2028 and the Polestar 6 roadster after that. Full-year 2025 retail sales came in at approximately 60,119 cars, growth of 34% compared to 2024’s 44,851. The company has revised its 2026 volume guidance down from low double-digit growth to low-to-mid single-digit growth, citing the Polestar 2’s end-of-lifecycle transition and the weight of the U.S. restructuring on first-half numbers.
What Polestar cannot revise is the American market question. The company built a retail presence, a service network, and a customer base in the U.S. All of that now pivots to a support-only posture. The product pipeline Polestar is counting on, four new models in three years, will launch into 28 markets instead of 29.
Source: Polestar. Images courtesy of Polestar.
