Michael Lohscheller, the new CEO of Polestar, the Sweden-based, China-controlled electric car company, yesterday claimed in a strategic review that “2025 will be the best year in the [company’s] history.” That’s largely because, profitwise, 2024 wasn’t great for Polestar, 2023 could hardly be described as stellar, and 2022 was nothing to write home about. 2021 and prior? Sadly, more of the same.

Polestar—which started life in 2005 as the brand name for a Volvo-tuning, gasoline-powered Swedish motorsports team, then transformed into an EV marque when Volvo bought the team 10 years later—has operated independently of Volvo since 2017, and it has yet to turn a profit. It sold 44,851 cars in 2024, 12,548 of these in Q3, and on the bottom line of that period, Polestar's $323 million net loss works out to the brand losing more than $25,740 for every EV it sold.

In yesterday’s review, Lohscheller claimed Polestar would grow sales by 30 to 35 percent in the coming three years, and he expects positive free cash flow “after investments” in 2027, which is two years later than the company’s previous break-even prediction.

Confirmation of the Polestar 7, an EU-manufactured compact SUV to be produced (perhaps in Slovakia) in two years or so, wasn’t enough to calm Wall Street jitters, and shares slumped by 14 percent soon after the strategic review went online. Since going public in June 2022, Polestar’s US-listed shares have declined 90 percent.

In December, Polestar secured $800 million from several banks with 12-month terms, and it is seeking an additional loan of $400 million. Majority-owned by Chinese billionaire Li Shufu, founder and chair of Geely—which means “lucky” in Mandarin—Polestar has suffered delays in rolling out new models and seen increased competition in the marketplace.

“Geely will continue to support Polestar’s development and strategy implementation, including working with Polestar to secure additional equity and debt funding,” Daniel Donghui Li, Geely’s chief executive officer, said in a statement.

“We manufacture regionally for the different regions in the world, so [we have] to be protected and make sure that we don’t depend on sudden changes,” Lohscheller stressed in yesterday’s review. “There are more offers in the market, so it becomes much more competitive,” he admitted.

“That's good for customers, because they have more choices, but for us it means there is more pricing pressure. We have to make sure that we have a cost-competitive product—and that’s exactly what we will do going forward. And that’s why the platform strategy is of highest importance, because efficiencies have to increase, and costs have to come down.”

Lohscheller, the former boss of Opel, has been in the job for just four months, replacing Thomas Ingenlath. More of a traditional finance-focused auto CEO than design-led Ingenlath, Lohscheller has been tasked with increasing sales, but this was made harder when, earlier this week, the outgoing Biden administration announced a ban on Chinese car sales.

“We don’t want 2 million Chinese cars on the road and then realize … we have a threat,” said US commerce secretary Gina Raimondo, citing national security concerns. Late last year, Raimondo proposed a ban on Chinese automotive software starting in the 2027 model year, with a ban on Chinese-made hardware beginning in 2029.

Polestar makes the Polestar 3 in a South Carolina factory, and last year warned that any sales ban “shuts down the operations of a lawfully organized US company with substantial US investments.”

“The US is an important market for us,” Kim Palmer, Polestar head of PR, tells WIRED. Suggesting the speccing of non-Chinese software and other materials, Palmer adds: “We are in advanced stages to adapt our future models to make sure they comply with the regulation in terms of hardware, software, and suppliers.”

Nevertheless, Lohscheller may have to ask the Trump administration for dispensation to sell its US-manufactured cars in the US. Trump’s antipathy toward EVs is well known, but it’s unclear how much of America’s EV policy will be influenced by Tesla CEO Elon Musk.

“It’s an unusual conflict of interest to see the CEO of Tesla in any way involved with EV policy for the entire country,” said Peter Wells, a business professor and director of the Centre for Automotive Industry Research at Cardiff University in Wales, UK. “There’s an enormous potential for Musk to rewrite the rules to suit Tesla’s best interests.”

If this proves to be the case, it could be mighty hard for Polestar to get dispensation. Perhaps that’s why, in his presentation, Lohscheller stressed Polestar’s pivot into France. A trademark dispute with Citroen—the company claimed the Polestar logo was too similar to its own—previously prevented Polestar from selling in the French market.

However, there’s a potential snafu. Would-be Polestar purchasers don’t yet qualify for France’s EV subsidy. “Polestar is not on the list of companies which have been approved by France to have qualified for their ecological bonus,” says Wells. “That’s not to say they couldn’t be on it in the future, but if they can’t get qualified for that scheme, they’ve got an incentive problem.”

Lochscheller said that 2024 had been a transition year for Polestar, and that now the company would revert to a more traditional dealership-based sales model.

“A lot of things need to change,” said Lochscheller, “starting with sales and distribution. I call it from showing to active selling. The company has done a good job setting up the direct-to-consumer baseline, now the key task is making sure that the active selling through retail partners is improving.” More showrooms, then, and less reliance on online sales—old-school thinking.

“Our [retail] footprint is growing,” said Lochscheller, citing the fact that there are now 25 Polestar showrooms in Sweden, 20 more than last year, and 20 showrooms in the UK, up from eight last year.

“By expanding dealership sales, Polestar can reach more customers, thereby increasing overall sales volume,” Stephanie Valdez Streaty, director of industry insights for Cox Automotive, publisher of the Kelley Blue Book vehicle valuer, tells WIRED. “Customers are more likely to invest in a brand they can interact with and rely on,” she says.

Wells agrees: “Polestar, under new leadership, is now finally going to focus on being better at retail, and being better at bringing the revenues in. They’re going back to the traditional [automotive] sales model and presenting themselves to consumers in a less exotic way.”

Lochscheller, Wells says, is instilling in Polestar a “sense of conservatism, an attempt to cut costs, drive up volumes, adopt a more traditional marketing strategy, and generate enough revenue to survive.”

Polestar cars are available in 27 countries. Production of the Polestar 4 will start in South Korea in the second half of 2025. Polestar 5, a Porsche Taycan-rivaling GT, is due to go on sale later this year and is built on the brand’s first bespoke EV architecture. The proposed Polestar 7 could do well in the US, claims Streaty. “Developing a vehicle in the premium compact SUV segment is a smart move,” she says.

With break-even still at least two years away, Polestar will likely need additional financing to see it through to profitability. But Polestar—reliant on support from its ultimate Chinese owner—may not have two years, claims Wells. “The Chinese EV market is booming, but there’s lots of competition, with rampant price cutting. The risk for Polestar is that their financial support may not last. Polestar might become an extravagance too far for Geely. Market conditions are moving faster than company strategic plans.”