Polestar reports deeper losses and plans reverse stock split to keep its Nasdaq listing

Why does Polestar need a reverse split

The electric‑vehicle maker Polestar reported a third‑quarter net loss of $365 million compared with a $323 million loss a year earlier. Its shares have fallen below $1, prompting Nasdaq to warn that the company could be delisted for not meeting minimum bid price requirements.

To avoid delisting, Polestar plans a reverse stock split. This will consolidate existing shares into fewer, higher-priced ADSs, allowing the price to move back above Nasdaq’s $1 minimum without changing any investor’s overall ownership stake.

What is a reverse stock split

A reverse stock split reduces the number of existing shares while increasing the value of each share. This does not change the overall ownership percentage for any investor.

Polestar plans to use this method to increase its ADS price above $1, according to Reuters. The move is intended to regain compliance with Nasdaq rules and keep its listing active.

How big is the planned change

Polestar announced that it will change its American Depositary Share (ADS) ratio from one ADS to one ordinary share to one ADS to thirty ordinary shares, according to the Company.

The company expects the ADS ratio change to be effective before the end of 2025. Full ADS holders will retain their percentage ownership and voting power after the split.

Does this affect ownership or voting power

According to Polestar, the ADS ratio change will not affect any shareholder’s percentage ownership or voting power. Full ADS holders will continue to have the same influence on company decisions.

Only fractional entitlements may be aggregated and sold for cash by Citibank, the Depositary Bank, according to Polestar. The net proceeds, after deducting fees and expenses, will be distributed to the relevant ADS holders.

What’s behind Polestar’s losses

Although Polestar’s revenue rose 36 % in the third quarter, its margins were negatively affected by U.S. tariffs, model delays, and strong competition in the electric vehicle market. These factors contributed to a widening net loss of $365 million, compared with $323 million a year earlier, according to Reuters.

The company also incurred costs from residual value guarantees in North America. These guarantees require Polestar to cover any gap when used EV resale values fall short of promised levels, increasing financial pressure.

How is the U.S. market treating Polestar

Polestar’s demand in the U.S. remains weak, as buyers are increasingly opting for hybrids and gasoline vehicles over fully electric models, according to recent reports.

To address softer U.S. sales, Polestar is focusing more on the European market. Europe accounts for around 75 % of the company’s 2024 sales and has become its most important and stable region, according to Reuters.

What changes is the company making

Polestar has reduced its headcount in multiple rounds, including approximately 10% of jobs in 2023, roughly 15% of its global workforce in early 2024, and 130 research and development roles in the UK in 2025, according to Reuters and other reports. These reductions aim to streamline operations and enhance efficiency during a period of financial losses.

The company has also transitioned from a direct sales model to a dealer-focused approach in certain regions. This change is intended to stabilize revenue streams and strengthen market presence in Europe.

Who owns Polestar and what’s their role

Polestar is majority‑owned by China’s Geely Holding and its chair, Li Shufu. This ownership provides financial backing but also exposes the company to global EV market pressures and risks.

Geely’s support has allowed Polestar to pursue restructuring measures. These include cost reductions, adjustments to production, and a stronger focus on the European market to offset weaker U.S. and other markets.

What about the company’s history on this

CEO Michael Lohscheller previously attempted a similar reverse stock split at Nikola, the now-bankrupt EV truckmaker, according to RTE. This experience demonstrates that he has utilized reverse splits as a tool to maintain stock listings in challenging situations.

Polestar’s current plan mirrors these past strategies. The company aims to implement a reverse stock split to meet Nasdaq listing requirements without affecting the overall ownership of its shareholders. (Source: Reuters)

Is the share price the only issue

Polestar’s challenges extend beyond its share price, including debt covenants it must comply with to remain in good standing with lenders. Financial obligations add pressure to maintain liquidity and stability while covering operational costs.

The company has negotiated amendments with lenders to stay compliant with its covenants. These steps demonstrate that maintaining a Nasdaq listing entails meeting both stock price rules and broader fiscal requirements.

How is Polestar’s revenue and geographic focus

In 2024, Polestar generated approximately 75% of its sales in Europe, 11% in the U.S., and 14% in other markets, according to Reuters. Europe has become central to the company’s strategy due to stronger demand and market stability.

Weak U.S. demand has prompted the company to shift its focus to the European market. This geographic emphasis is designed to mitigate losses and sustain overall revenue growth despite challenges in North America.

What model launch did they announce

Polestar unveiled its new Polestar 5 in September 2025 at the IAA Auto Show in Munich. The launch highlighted the company’s technological advancements in EV design and performance.

The company confirmed it would skip launching the Polestar 5 in the U.S. and China. These decisions prioritize markets where the company expects stronger near-term demand and higher sales potential.

Don’t miss it. Polestar 3 just set a remarkable 581-mile EV SUV distance record.

What is the risk of being delisted

Nasdaq warned Polestar that if its share price remains below the minimum bid requirement, the company could face delisting from the exchange. This has created urgency to take corrective steps in the short term.

The reverse stock split is intended to mechanically increase the ADS price above $1. This action is designed to restore compliance with Nasdaq rules and maintain Polestar’s public listing.

Stay tuned for more. The Polestar 2 now faces a federal probe over rear-view camera failures, a key issue that could test the brand’s quality control and reputation.

Enjoying these insights? Share your thoughts or hit follow to get more stories like this delivered straight to you.

Read More From This Brand:

• Five common scams to avoid when buying or selling cars
• What could happen if all cars were electric vehicles
• Ten classic muscle cars that middle-class buyers can afford for fun and investment

Don’t forget to follow us for more exclusive content right here on MSN.

If you liked this article, you’ll LOVE our free email newsletter.

This slideshow was made with AI assistance and human editing.