Polestar Reports Second Quarter Select and H1 2026 Financial Results

• Record H1 2026 retail sales of 30,423 cars supported by 39% growth of retail network year-on-year
• Intensified competition and regulatory headwinds, especially in the U.S., impacting financial performance
• Operating loss reduced by 43% year-on-year, with no impairment expenses recognized in H1 2026
• Continued cost discipline measures and lower headcount spend
• Strengthened capital structure and improved liquidity position
• Cash position of approx. USD 888 million as of June 30, 2026
• 2026 guidance: low-to-mid single-digit volume growth

GOTHENBURG, Sweden--(BUSINESS WIRE)--Polestar (Nasdaq: PSNY) presents its consolidated financial results and operational metrics for the three-month and six-month periods ended June 30, 2026.

Michael Lohscheller, Polestar CEO, said: “The operational improvements being implemented across the business are starting to show results. We cut our reported operating loss by 43% in the first half of 2026 versus last year, when a significant net impairment expense impacted our results. Working in a challenging environment, we continue to be disciplined in our execution and focused on improving the business.

"Following the opening of orders for Polestar 4 SUV, production has ramped up in Busan, South Korea. The first cars have been shipped from the factory and are set to be delivered to customers during the fourth quarter. The first Polestar 5s are expected to reach customers in the coming weeks - setting us up for an exciting end to the year."

Key financial and operational highlights for H1 2026 (year-on-year comparison)

• Retail sales volumes above the comparable period, supported by continued transition to an active selling model, retail expansion, attractive model line-up and a growing share of Polestar 4
• Revenues down (4)% to USD 1,360 million, mainly due to pressure on pricing, residual value guarantee costs, mainly in the U.S. and related to U.S. Restructuring measures following the decision by the U.S. department of Commerce's Bureau of Industry and Security ("the BIS"), and lower carbon credit sales
• Gross margin of (8)% improved from (49)%, which reflected net impairment expense recognized in H1 2025
• Adjusted Gross Margin of (9)% driven by decrease in revenues, the U.S. Restructuring measures and H1 2025 one-off positive impacts
• Selling, general and administrative expenses stable year-on-year with a decrease in general and administrative expenses
• Operating loss of USD (629) million and Net loss of USD (842) million improved year-on-year by 43% and 29%, respectively, mainly due to the impairment expense recognized in the prior period
• Adjusted EBITDA loss of USD (521) million mainly due to higher adjusted gross loss and foreign exchange impacts
• Cash position of approx. USD 888 million as of June 30, 2026
• New equity of USD 700 million raised from external investors
• Debt-to-equity conversions of approx. USD 640 million of loans outstanding to Geely Sweden and Volvo Cars into Polestar's equity completed
• Extension of maturity of remaining USD 660 million of Volvo Cars' shareholder loan from December 2028 to December 2031
• Largest model offensive in Polestar’s history: four new cars planned in three years, starting in 2026 with Polestar 5 and Polestar 4 SUV
• Polestar announces launch of sales in the Baltic region
• 2026 volume guidance updated to low-to-mid single-digit volume growth

Guidance

Polestar has continued to expand its retail network at pace. The upcoming launch of Polestar 4 SUV in the fourth quarter of 2026, followed by the launch of the successor to Polestar 2 in 2027, are expected to further strengthen the Company's product portfolio.

Looking ahead to the second half of 2026, the market environment is expected to remain highly competitive and volatile. Polestar remains focused on delivering quality growth and is updating its 2026 volume guidance to low-to-mid single-digit volume growth from previous low double-digit volume growth. This reflects the performance in the first half of 2026 as well as the expected portfolio transition with the current Polestar 2 approaching the end of its lifecycle and the planned launch of Polestar 4 SUV in the fourth quarter of 2026. The sales mix and channel mix are expected to continue positively evolving, reflecting our stated strategy of entering fast-growing, high-value segments and growing the retail channel through the introduction of four new vehicles over a three-year period beginning in 2026.

U.S. Restructuring

On June 25, 2026, Polestar announced that it was informed by the U.S. Department of Commerce's Bureau of Industry and Security of its decision to not grant Polestar an authorization under the current Connected Vehicle Rule to sell vehicles in the U.S. from model year 2027 onwards. The Company expects to continue selling previous model years in the U.S. from its inventory after which it will cease the sale of new vehicles, with its remaining activities in the U.S. then expected to focus on supporting customers in the U.S., including providing access to its service network and honoring warranty and other product commitments.

As a result of the Bureau of Industry and Security's decision, Polestar has implemented a number of measures affecting its U.S. new vehicles sales operations, including actions relating to employees, dealers and other commercial arrangements (the "U.S. Restructuring"). While Polestar will continue to perform certain activities in the U.S. to support its existing customers, the aforementioned actions, together with the resulting effects on vehicles and related assets, led to material adjustments that are included in the Company’s interim financial statements for the six-month period ended June 30, 2026.

Noting the significant judgement and subjectivity involved in arriving at these calculations, in aggregate the Company estimates that the U.S. operations increased its consolidated operating loss by approximately USD 211 million during the six-month period ended June 30, 2026, compared to an increase of approximately USD 110 million in the six-month period ended June 30, 2025, and that the U.S. operations increased its consolidated net loss by approximately USD 211 million during the six-month period ended June 30, 2026, compared to an increase of approximately USD 104 million in the six-month period ended June 30, 2025. For the three-month period ended June 30, 2026, in aggregate the Company estimates that the U.S. operations increased its consolidated operating loss by approximately USD 170 million, compared to an increase of approximately USD 84 million in the three-month period ended June 30, 2025, and that the U.S. operations increased its consolidated net loss by approximately USD 165 million during the three-month period ended June 30, 2026, compared to an increase of approximately USD 78 million in the three-month period ended June 30, 2025.

Based on current estimates, approximately USD 130 million of negative adjustments related to the U.S. operations arose as a result of the decision from the U.S. Department of Commerce's Bureau of Industry and Security and are included in the Company's consolidated operating loss and net loss for the three-month and six-month periods ended June 30, 2026. These adjustments primarily related to residual value guarantees costs, net realizable value of inventory, and restructuring provisions related to employees and suppliers/partners costs incurred in the U.S in the reporting period. While these adjustments reflect the Company's assessment of the U.S. Restructuring based on current information, further negative adjustments should be expected in future periods to reflect additional costs related to personnel and inventory as the U.S. Restructuring proceeds through its phases.

Key financial highlights

The table below summarizes key financial results for the six months ended June 30, 2026:

• Retail sales totaled 30,423 cars, representing an increase of 0.4% year-on-year (YoY) from 30,289 cars in the comparable period, driven by continued transition to an active selling model, retail expansion and attractive model line-up and a growing share of Polestar 4.
• Revenue of USD 1,360 million, down by (4.4)% from USD 1,423 million a year earlier, was driven by volumes and product mix, as well as positive foreign exchange impact, which were more than offset mainly by pressure on pricing, residual value guarantee costs mainly in the U.S. and related to the restructuring measures as a result of the BIS's decision, and lower carbon credit sales. Carbon credits sales totaled USD 57 million in the period from USD 90 million a year earlier mainly due to the increased competition in the EU, including USD 4 million worth of carbon credits sales booked in other operating income (H1 2025: USD 18 million) mainly due to regulatory changes in the U.S.
• Cost of sales decreased to USD (1,475) million, an improvement of 30.6% from USD (2,126) million in H1 2025 primarily driven by net impairment expense of USD (724) million recognized in the first half of 2025. Other cost of sales grew (5.3)% due to higher production costs associated with the carline mix, higher duties on imported cars, parts and components for the EU and the U.S., and smaller product costs reduction due to higher raw materials costs, mainly in batteries. There were as well negative impacts from the U.S. Restructuring measures leading to adjustment of the U.S. inventory to net realizable value and H1 2025 one-off positive impacts, which did not repeat in H1 2026, partially offset by positive adjustment of inventory, outside of the U.S., to net realizable value.
• Gross margin was a negative (8.4)%, an improvement from (49.4)% in the comparable period, with the H1 2025 gross margin primarily impacted by net impairment expense of USD (724) million.
• Adjusted Gross Margin at (8.5)%, from 1.4% a year earlier, due to Adjusted Gross Loss of USD (116) million in the period due to lower revenues and higher other cost of sales as detailed above, partially offset by positive margin development due to the carline mix, especially from a growing share of Polestar 4 in the sales mix.
• Selling, General and Administrative (SG&A) expenses of USD (431) million were a combination of an increase in selling expenses related to sales agent remuneration due to volume and carline mix and higher advertising, selling and promotion activities in the period following launch in France in June 2025 and launch of Polestar 5 in different markets fully compensated by strict cost discipline and positive impact of continued headcount reduction in General and Administrative expenses.
• Research and development (R&D) expenses decreased to USD (15) million from USD (31) million in the comparable period, driven by reduced headcount and higher capitalization rate on vehicle development programs.
• Operating loss was USD (629) million, an improvement of 42.6% compared to USD (1,096) million in H1 2025, primarily due to factors described above. Other operating income decreased due to the termination in 2025 of commercial operations of Polestar's investment in Polestar Times Technology, and the related rendering of transition services, as well as lower carbon credits income. Other operating expense was higher due to the U.S. Restructuring measures, mainly related to the U.S. Polestar organizational changes, investments and suppliers. Net foreign exchange losses in H1 2026 versus gains in H1 2025 on operating activities were due to foreign exchange movements: depreciation and appreciation of Swedish krona against Chinese yuan in the first half of 2026 and 2025, respectively.
• Net loss of USD (842) million improved by 29.4% compared to net loss of USD (1,193) million in H1 2025, driven by factors described above; finance expense was higher on higher levels of outstanding external financing; net foreign exchange losses in H1 2026 versus gains in H1 2025 on financial activities arose from negative FX movements of Chinese yuan and U.S. dollar.
• Adjusted EBITDA of USD (521) million, increased by USD (219) million from USD (302) million in the comparable period, reflecting the Adjusted Gross Loss in the period impacted by the U.S. Restructuring measures, H1 2025 positive one-off impacts, adverse foreign exchange movements and negative other operating income impacts.
• Further details are provided in the reconciliation tables for non-GAAP measures in Appendix B.

Select results for Q2 2026

The table below summarizes key operational and financial results and provides the year-on-year (YoY) comparison for Q2 2026 results:

For the three months ended June 30, 2026:

• Retail sales totaled 17,296 cars, down (4.0)% YoY from 18,026 cars a year earlier.
• Revenue of USD 727 million, down by (8.1)% from USD 791 million in the comparable period, driven predominantly by lower retail sales volumes, pressure on pricing, residual value guarantee costs mainly in the U.S. and related to the U.S. Restructuring measures as a result of the BIS's decision, as well as lower carbon credits sales. Carbon credits sales totaled USD 36 million in the period from USD 61 million a year earlier, there were no carbon credits sales booked in other operating income in the period (Q2 2025: USD 19 million) mainly due to regulatory changes in the U.S.
• Gross margin at (13.1)%, an improvement of 84.0 ppts from (97.1)% a year earlier, mainly due to net impairment expense of USD (724) million recognized in Q2 2025.
• Adjusted Gross Margin at (13.1)%, from (5.6)% in the comparable period, mainly due to lower revenue, negative impact from the U.S. Restructuring measures resulting in adjustment of the U.S. inventory to net realizable value and Q2 2025 positive one-off impacts, offset by positive margin development due to the carline mix, especially from a growing share of Polestar 4 in the sales mix, and positive adjustment of inventory to net realizable value, excluding in the U.S. market.
• Net loss of USD (459) million, an improvement of 55.3% compared to net loss of USD (1,027) million for Q2 2025, is mainly due to net impairment expense of USD (724) million recognized in Q2 2025.
• Adjusted EBITDA Loss of USD (286) million, compared to USD (206) million in Q2 2025, due to Adjusted Gross Loss of USD (95) million impacted by the U.S. Restructuring measures, adverse foreign exchange movements and negative other operating income impacts offset by lower SG&A expenses driven by cost discipline and reduced headcount despite higher sales agent remuneration driven by the carline mix and higher capitalization rate on spend on vehicle development programs.

Key operational highlights

The table below summarizes key operational results as of and for the three and six months ended June 30, 2026:

• Retail sales totaled 30,423 cars in H1 2026, representing an increase of 0.4%, compared with 30,289 new cars sold in H1 2025, driven by the transition to an active selling model, retail expansion and Polestar's attractive model line-up and a growing share of Polestar 4.
• Sales points, excluding China, grew by 39.1%. In H1 2026, Polestar opened 24 new retail sales points with a total of 235 sales points at the end of H1 2026. During H1 2026, Polestar signed up 20 new retailer partners with a total of 178 retail partners, representing an increase of 13%, from the end of 2025.
• The increase in external sales with a repurchase obligation is primarily related to Polestar 4 cars in Germany, France and the United Kingdom.
• Polestar increased sales of internal cars to support its retail network expansion.

Key cash flow highlights

The table below summarizes cash flow for the six months ended June 30, 2026:

• Operating cash outflow of USD (850) million, mainly driven by the operating loss net of non-cash adjustments, financial interest expenses and a net negative movement in working capital mainly due to negative changes in trade payables partially offset by positive changes in inventory and trade receivables.
• Investing cash outflow of USD (211) million included additions to property, plant, and equipment as well as intangible assets; investments were predominantly driven by investments in intellectual property and tangible assets related mainly to model year Polestar 3 and Polestar 4 updates, Polestar 5, the new Polestar 4 variant and future car lines.
• Financing cash inflow of USD 769 million, driven by the new equity raises of a total of USD 700 million in February and March 2026 and net increase in proceeds from borrowings partially offset by repayment of debt financing.
• Cash position of USD 888 million, compared to the H1 2025 cash position of USD 719 million.

Key loan facilities and funding highlights

• During H1 2026, approx. USD 1.7 billion worth of facilities were either renewed (approx. USD 1.7 billion) or newly secured (approx. USD 60 million).
  • New facilities include the restructuring and renewal of the EUR 400 million Trade Finance Facility ("TFF") in February 2026, and subsequent increase from EUR 400 million to EUR 450 million, with new participation of Fubon Bank (Hong Kong) Limited in June 2026. Standard Chartered Bank continues to act as Structuring Bank and Facility Agent for the TFF.
• From January to March 2026, Polestar secured USD 0.7 billion of new equity.
• Since the start of 2026, Geely Sweden and Volvo Cars converted approx. USD 300 and 340 million of loans outstanding to Polestar into Polestar's equity. Volvo Cars extended the maturity of the remaining shareholder loan of USD 660 million to December 2031.
• On 3 June 2026, Polestar Geely Sweden Holdings AB agreed to extend the term of the outstanding amount of the subordinated term loan facility, which was initially provided to Polestar in December 2025, to 30 June 2027.

The Company was in compliance with its covenants as of June 30, 2026.

The Company continues to have a constructive dialogue with lenders of the Company’s USD 950 million Club Loan regarding its future club loan obligations. On March 31, 2026, the Club Loan lenders agreed to amend the debt-to-asset ratio range for all test periods for 2026 as well as the minimum revenue covenant for 2026. Polestar complied with Club Loan covenants as of June 30, 2026.

With the support from Geely Holding Group, we have implemented significant steps to strengthen balance sheet and improve our debt and liquidity positions, and we continue to consider new equity and debt funding.

Key recent developments and business highlights

• Polestar 4 SUV started sales on September 2
• Polestar expands retail presence in Europe through new markets in the Baltics
• Google Gemini launches in select models and regions
• Polestar 3 gets 800V upgrade for new model year
• Polestar 5 receives Autobest award
• Polestar 5 LCA published
• Polestar Charge expands offer and grid rewards
• Polestar 3 named safest Executive Car of 2025

Conference call

Management will host a conference call at 14:00 Central European Time (08:00 US Eastern Time) today, accessible via the Polestar Investor Relations website. To join the call, please use this link https://edge.media-server.com/mmc/p/czg84qrx/ or follow the instructions available under Events on the Polestar Investor Relations website.

Calendar

Polestar expects to report its retail sales volumes for Q3 2026 on October 8, 2026.

Polestar expects to publish Q3 2026 select financial results on November 5, 2026 and host an audio call; further details will be available on Polestar's Investor Relations website in due course.

Notes

All financial figures are in millions of U.S. dollars (USD). Unless otherwise stated, the performance shown in this press release covers the three-month period ended June 30, 2026 (Q2 2026) and is compared to performance during and as of three-month period ended to June 30, 2025 (Q2 2025) and the six-month period ended June 30, 2026 (H1 2026) and is compared to performance during and as of six-month period ended to June 30, 2025 (H1 2025).

About Polestar

Polestar (Nasdaq: PSNY) is the Swedish electric performance car brand with a focus on uncompromised design and innovation, and the ambition to accelerate the change towards a sustainable future. Headquartered in Gothenburg, Sweden, its cars are available in 31 markets globally across North America, Europe and Asia Pacific.

Anna Gavrilova
Head of Investor Relations
anna.gavrilova@polestar.com

Ellen Broomé
Head of PR
ellen.broome@polestar.com