Polestar (PSNY) Stock Falls 3% as US Ban Hits Quarterly Sales

TLDR

• Polestar Q2 sales dropped 4% to 17,296 vehicles, down from 18,026 a year earlier
• Stock fell over 3% following the results
• The US Commerce Department denied Polestar authorization under the Connected Vehicles Rule, banning it from the US market from the 2027 model year
• Europe now accounts for 80% of Polestar’s first-half sales as the company shifts focus
• CEO Michael Lohscheller acknowledged the US exit but said the market “was not a profitable business for us”

Polestar reported a 4% drop in second-quarter sales on Thursday, with the stock falling over 3% as investors digested the results alongside the company’s looming exit from the US market.

Polestar Automotive Holding UK PLC, PSNY

The EV maker sold 17,296 vehicles in Q2, down from 18,026 in the same period last year.

The sales decline comes weeks after the US Commerce Department denied Polestar authorization under the Connected Vehicles Rule. The rule restricts cars with connected-vehicle technology tied to China, and the decision effectively bars Polestar from the US market starting with the 2027 model year.

Polestar is majority-owned by China’s Geely Holding. Sister brand Volvo Cars, also majority-owned by Geely, secured authorization a month earlier — a contrast that drew attention at the time.

CEO Michael Lohscheller said he was not happy about the US exit. But he noted the American market “was not a profitable business for us,” and that it required a level of resource investment the company couldn’t justify given the regulatory outcome.

Polestar will continue selling its existing Polestar 3 and Polestar 4 inventory in the US. It will also maintain its service network and keep selling second-hand cars. The ban does raise questions about the Polestar 3’s future, as it is the company’s only US-manufactured model.

Europe Takes Center Stage

With the US chapter closing, Polestar has leaned heavily into Europe. The region accounted for 80% of the company’s sales in the first half of 2026. That geographic pivot has become a core part of how the company is managing through a tough period for EV demand globally.

Rather than launching entirely new models, Polestar has chosen to refresh existing ones. In February, the company announced updated versions of its best-selling Polestar 2 and Polestar 4, set to roll out over the next year.

In May, Polestar reported a larger first-quarter loss, as pricing pressure and US tariffs ate into margins despite stronger sales volumes at the time.

What’s Coming Next

Polestar isn’t standing still on the product side. CEO Lohscheller confirmed that first customer deliveries of the Polestar 5 are on track to begin, and that production of the Polestar 4 SUV has started, with first deliveries expected in Q4.

Thursday was a rough day for EV makers more broadly. Porsche, which competes with Polestar through its Macan and Taycan models, also reported a first-half delivery decline. Porsche cited market pressure in China and the expiration of US EV tax credits.

For Polestar, the combination of a US ban, a 4% sales drop, and ongoing losses keeps the pressure on management to prove the European pivot can carry the business.

Lohscheller said the company will act on the “clear decision” from US authorities and move forward.

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