The electric-car maker is reporting rising sales and new financing, yet now warns that survival may depend on fresh cash. Polestar has issued a formal “going concern” warning, signaling that a Chapter 11 bankruptcy could be ahead if funding dries up.
Electric vehicle makers still face high prices and everyday charging worries
To break through with mainstream drivers, EV brands must persuade customers to pay more than for comparable gas cars and to trust unfamiliar battery technology.
Many motorists also remain uneasy about charging, wondering whether they will find a working plug on longer trips. Who wants to buy an EV if they cannot be sure where to plug in?
Polestar posts stronger numbers but warns about its ability to survive
In its latest quarter, Polestar tried to highlight progress. CEO Michael Lohscheller said the company continues to “make great progress” transforming its commercial operations and cutting costs, while selling more cars at improved margins through an expanding retail network. Key figures highlighted by the company included:
- Gross margin at 7%, a 15‑point improvement versus the first quarter of 2024.
- Net loss down 31%, with adjusted EBITDA loss improving 46% year over year.
- More than $900 million in financing facilities secured or renewed in the first quarter of 2025.
- Cash on hand of $772 million at the end of that quarter.
Retail sales reached an estimated 12,304 vehicles, up 76.4% year over year, and revenue jumped 84.2%, helped by higher volumes and a richer product mix. The numbers suggest an EV brand on the rise.
Yet in the same filing, management concluded that there is “material uncertainty” about Polestar’s ability to obtain enough financing to support its cash needs and stay in compliance with debt covenants, effectively warning that its status as a going concern is at risk.
Funding pressures and past EV bankruptcies put Polestar under the spotlight
The disclosure jolted the market. Polestar shares slumped and have been trading below $1 over the past 52 weeks, a level that makes selling new stock harder and highlights worries about liquidity.
CFRA Research analyst Garrett Nelson told Reuters that the main challenge is EV demand without generous incentives, combined with limited liquidity.
On a later call, Lohscheller said lenders agreed to amend loan covenants and that the company remains in compliance.
Even so, InvestingPro data points to a heavy debt load of $5.1 billion and troubling cash burn, while Cantor Fitzgerald estimates Polestar will need more than $2 billion in additional capital through 2028.
Deloitte & Touche LLP has also questioned whether the company can continue as a going concern.
With sales improving but funding needs so large, can Polestar really convince backers to keep writing checks?
Corporate bankruptcies have been climbing for three years, and the EV sector has already produced a string of failed or restructured firms. Some of the most notable electric‑vehicle cases include:
| Year | Company | Status |
| 2022 | Electric Last Mile Solutions (U.S.) | Chapter 7 liquidation |
| 2023 | Proterra (U.S.) | Chapter 11, assets sold |
| 2025 | Nikola (U.S.) | Chapter 11 |
This record shows how unforgiving the market can be for electric‑car specialists that lack deep pockets and their own charging network. For Polestar, avoiding Chapter 11 will depend on turning recent growth into enough confidence from creditors and investors to secure the lifeline it clearly needs.
