Polestar sales rise as pricing pressure and tariffs weigh on margins

Polestar (NASDAQ:PSNY) reported a divergence between volume growth and profitability for the first quarter of 2026, as the electric vehicle manufacturer navigated a complex landscape of global trade barriers and aggressive industry price-cutting.

The Swedish performance EV brand delivered an estimated 13,126 cars during the quarter, a 7% increase over the 12,263 vehicles sold in the first quarter of 2025.

Despite the higher delivery volumes, revenue remained nearly flat at $633 million, compared to $632 million a year earlier.

The modest 0.2% increase was supported by favorable currency movements in the euro and British pound, which helped offset significant downward pressure on vehicle pricing and a reduction in carbon credit sales, which fell to $21 million from $29 million in the prior-year period.

The company’s profitability metrics faced severe headwinds during the quarter.

Gross margin swung to negative (3.2)% from a positive 10.3% in Q1 2025.

Management attributed the contraction to several factors, including intensified market pricing pressure, the impact of newly implemented EU and U.S. tariffs, and a shifting product mix.

While the higher-margin Polestar 4 increased its share of total sales, this was offset by lower volumes of the Polestar 3 and one-off operational impacts.

Polestar reported a net loss of $383 million for the quarter, more than double the $166 million loss recorded in the same period last year.

Beyond the gross loss, the result was heavily impacted by negative foreign exchange movements, particularly the Chinese yuan’s effect on operating and financing liabilities.

Adjusted EBITDA stood at a loss of $235 million, compared to a loss of $96 million in the prior-year period.

As of March 31, 2026, Polestar’s cash position was $676 million, down from $1,159 million at the end of 2025.