TLDR
- Polestar stock dropped 23% in pre-market trading on August 28 after rallying 17% the previous day
- Q2 2025 deliveries grew 38% to 18,049 vehicles, continuing strong sales momentum from earlier quarters
- Company secured $450 million credit facility and $200 million equity investment to strengthen balance sheet
- Stock remains highly volatile, up 269% from 52-week low but still faces profitability challenges
- Analysts maintain bearish outlook with average price target of $0.97 despite recent operational improvements
Polestar Automotive stock whipsawed investors again in late August 2025. The electric vehicle maker’s shares plummeted over 23% in pre-market trading on August 28.
This dramatic drop came just one day after the stock soared nearly 17% on Tuesday. The rally pushed shares from $1.10 to over $1.30 during intraday trading.
The volatility shows how quickly sentiment can shift for this struggling EV company. Speculation about a potential U.S.-EU trade deal had fueled Tuesday’s gains.
Such a trade agreement could reduce tariffs on European vehicles entering the American market. This would benefit Polestar’s upcoming Polestar 7, which will be manufactured in Europe.
Despite the stock’s wild swings, Polestar has posted some encouraging operational results. Q2 2025 deliveries reached 18,049 vehicles, representing 38% growth compared to the same period last year.
The growth rate slowed from Q1’s stronger percentage gains. However, Q1 was working from a much smaller base of deliveries.
First-half 2025 sales jumped 51% compared to 2024. Q1 revenue surged 84% to $732 million, with improved gross margins.
The company also reduced its net loss by 31% year-over-year in Q1. These improvements suggest Polestar is making progress toward profitability.
Capital Raises Address Balance Sheet Concerns
Polestar has taken steps to address its precarious financial position. The company secured a $450 million credit facility to support operations.
In June, PSD Investment Limited agreed to purchase $200 million in newly issued shares. This investor is controlled by Eric Li, founder and chairman of Geely Holding Group.
The equity deal closed in late July. While it provided needed cash, it also diluted existing shareholders at a price below current levels.
These capital raises were necessary given Polestar’s debt load. The company finished Q1 with $732 million in cash but nearly $4.8 billion in total debt.
Stock trading metrics reveal the speculative nature of current investor interest. Over 43 million shares were short as of mid-August data.
This represented more than 20 days of average trading volume. Short interest equals roughly 12.5% of the company’s estimated float.
Analyst Sentiment Remains Bearish
Wall Street analysts remain pessimistic about the stock’s prospects. Two sell ratings face off against two hold ratings as of Wednesday’s close.
The average analyst price target stands at $0.97. This implies downside from the recent $1.30 trading level.
That target has fallen from $2.68 one year ago. It was in the low double digits back in late 2022 after Polestar’s SPAC merger.
The stock now trades at 0.94 times expected 2025 revenues. This valuation sits near other Chinese EV companies like NIO and BYD.
Technical indicators show the stock in overbought territory. The RSI reading of 70.12 suggests a pullback could be coming.
Quarterly earnings are due next month. Analysts expect a loss of 23 cents per share on revenue of $717.9 million.
Early registration data from key European markets shows mixed results for Q3. Norway, Netherlands, and Spain registrations are down 8% through 57 days.
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