Cantor Fitzgerald moved to an Underweight rating on Polestar (NASDAQ: PSNY) following the automaker's downward revision to its delivery outlook. In a note, analyst Andres Sheppard said the downgrade reflected a mix of factors including lower delivery expectations, anticipated additional capital needs, tariff headwinds, recent share price gains, and an unclear approach to autonomy.
Polestar has revised its medium-term production trajectory, now projecting only low double-digit volume growth in fiscal 2026. That marks a sharp departure from the company’s earlier objective of 30% to 35% compound annual retail sales growth for the 2025-2027 period. Cantor characterized the updated guidance as a material reset.
The analyst quantified the impact of the revision, noting the new outlook could translate to a roughly 16% reduction in FY26 revenue versus prior expectations. To reflect the change, Cantor trimmed its FY26 delivery estimate to 66,720 vehicles from 80,720 and lowered its FY26 revenue projection to about $3.7 billion from roughly $4.4 billion.
Liquidity and funding remain central concerns. Polestar has raised more than $1 billion in financing since December and reported about $995 million of liquidity as of the third quarter of 2025. Despite those inflows, Sheppard expects further capital raises will be necessary. Cantor’s model assumes a monthly cash burn near $124 million and projects Polestar will need to raise in excess of $6 billion through the first half of 2030.
Geopolitics and tariffs are additional overhangs for the company given its manufacturing footprint concentrated in China and South Korea and limited U.S. production. The analyst reiterated an expectation that tariffs and geopolitical dynamics will materially affect Polestar.
Operational results for the most recent quarter offer mixed signals. Polestar reported third-quarter 2025 revenue of approximately $748 million, an increase of 36% year over year. However, gross margin was about negative 6.1%, which fell short of Cantor’s estimate, and adjusted EBITDA recorded a loss of $259 million.
Looking forward, Polestar continues to plan product rollouts intended to expand its lineup. The company is targeting the Polestar 5 grand tourer for delivery starts in summer 2026 and intends to introduce a redesigned successor to the Polestar 2 in the first half of 2027. Cantor’s downgrade and reduced forecasts reflect how the updated delivery guidance, funding trajectory, and external trade risks reshape its view of the company’s near-term financial profile.
Key points
- Cantor Fitzgerald downgraded Polestar to Underweight, citing weaker delivery prospects and capital needs.
- Cantor cut FY26 delivery estimate to 66,720 vehicles and revenue to about $3.7 billion, down from previous forecasts of 80,720 deliveries and roughly $4.4 billion in revenue.
- Polestar reported Q3 2025 revenue around $748 million, up 36% year over year, with gross margin near negative 6.1% and adjusted EBITDA loss of $259 million; funding needs and tariff exposure weigh on the outlook.
Risks and uncertainties
- Funding risk - Cantor projects continued cash burn of roughly $124 million per month and expects more than $6 billion in additional capital will be required through H1 2030, which has implications for capital markets and financing conditions.
- Geopolitical and tariff risk - Heavy production in China and South Korea with limited U.S. manufacturing leaves Polestar exposed to tariff and geopolitical shifts affecting the auto manufacturing sector and global supply chains.
- Execution risk on growth - The sharp downward revision to FY26 volume guidance creates uncertainty for revenue and margin trajectories across the electric vehicle manufacturing sector.