A government rule about Chinese-controlled vehicle software just cost one automaker its entire US market, and the damage is now visible in its delivery forecast. A delivery forecast, in plain terms, is the target number a company tells investors it expects to ship in a year. Polestar Automotive Holding UK PLC (NASDAQ: PSNY) cut that number on September 3, lowering its 2026 expectation from low double-digit annual volume growth to low-to-mid single digits, implying roughly 61,900 to 63,100 vehicles, Reuters reported. Shares fell as much as 16% on the news.
What the US ban actually means
In June, the Commerce Department denied Polestar authorization to sell model year 2027 and later vehicles in the United States, making it the first automaker forced out of the US market under a rule restricting Chinese-controlled vehicle software and data systems. Polestar is a Swedish brand backed by China's Geely, which placed it in scope of that restriction. The ban cuts off the company's pipeline of new models in what had been a significant market.
The direct cost of unwinding its US operations ran to roughly $130 million in restructuring charges during the second quarter. Those charges cover inventory write-downs, residual value guarantees on cars already leased or financed, and provisions for employees and suppliers. Second-quarter revenue fell 8% year over year to $727 million, missing analyst estimates. First-half retail sales grew only 0.4% compared with the same period a year earlier.
Where the money stands
Free cash flow, the cash a company generates or consumes after accounting for operations and capital spending, worsened to negative $1.06 billion in the first half of 2026, from negative $787 million in the same period a year earlier. That deterioration came even after Polestar raised $700 million in fresh equity during the period.
Net loss narrowed 55.3% to $459 million. The prior-year figure, though, included a large impairment charge, a one-time write-down of asset values, which makes the comparison less informative than the headline number suggests.
CEO Michael Lohscheller said the firm remains "disciplined in our execution and focused on improving the business." Polestar opened its order book for the Polestar 4 SUV and has several refreshed models planned as it looks to build demand outside the US.
Institutional interest in the stock remains minimal. Insider Monkey's database shows just two hedge funds held Polestar shares in both the first and second quarters of 2026, with combined holdings valued at roughly $2 million.