TLDR
- Polestar stock dropped 17% in pre-market trading August 28 after surging 29% the day before
- Q2 deliveries jumped 38% to 18,049 vehicles while revenue grew 84% in Q1 to $732 million
- Company raised $650 million through credit facility and equity investment to improve finances
- Short interest exceeds 12% of float as traders bet against the volatile EV stock
- Analysts target $0.97 price despite stock trading at $1.30 after recent rally
Polestar stock experienced another wild swing, shares plunged over 17% in pre-market trading on August 28.  The crash came just 24 hours after a massive 29% rally on Wednesday.
Trade deal speculation had driven Tuesday’s gains. Rumors of a U.S.-EU agreement that could cut tariffs on European vehicles sparked buying interest.
Lower tariffs would help Polestar’s future Polestar 7 model. That vehicle will be built in Europe for the global market.
The stock remains up 269% from its 52-week low of 84 cents. However, it’s still far below the $13 level where many investors first bought in.
Delivery Growth Continues Despite Market Chaos
Polestar’s business metrics show steady improvement. Q2 2025 deliveries reached 18,049 vehicles, up 38% from last year.
The company delivered strong first-half results. Total 2025 sales through June rose 51% compared to 2024.
Q1 revenue jumped 84% to $732 million. Gross margins improved while the net loss fell 31% year-over-year.
These numbers suggest operational progress. The Polestar 5 launches before year-end, adding another model to the lineup.
Financial Moves Buy Time
Polestar addressed its cash crunch through two major deals. The company secured a $450 million credit facility in recent months.
A separate $200 million equity investment came from PSD Investment Limited. Eric Li’s Geely Holding Group controls this investor.
The equity deal closed in July but diluted shareholders. The purchase price came below current trading levels.
These moves were critical given Polestar’s debt burden. The company had $4.8 billion in total debt against just $732 million in cash at Q1-end.
That debt level approached the $5.5 billion covenant limit. The new funding provides breathing room but doesn’t solve long-term needs.
Short sellers remain active in the stock. Over 43 million shares were short as of mid-August, equal to 12.5% of the float.
Trading volume spiked 18-fold on Wednesday. Some buying may have come from shorts covering positions.
Wall Street analysts stay bearish on the stock. Two sell ratings match two hold ratings with no buy recommendations.
The average price target sits at $0.97. This implies downside from current $1.30 levels and reflects continued skepticism.
That target has dropped from $2.68 just one year ago. Estimates keep falling as the company struggles to meet original projections.
Quarterly earnings arrive next month. Analysts expect a 23-cent loss per share on $717.9 million in revenue.
Early European registration data shows mixed Q3 trends. Key markets including Norway, Netherlands and Spain are down 8% through 57 days.
