POLESTAR has revealed its Polestar 7, a premium compact SUV, will be built in Europe.

The news came as the brand presented an updated strategy, as it starts its next chapter, with significant changes being made to improve operational, commercial and financial performance.

The updated business plan targets a compound annual retail sales volume growth of 30-35% for 2025 to 2027.

After the global success of Polestar 2 and ramp-up of deliveries of Polestar 3 and Polestar 4, the second half of 2025 will see the planned start of sales of Polestar 5, the performance four-seat grand-tourer based on Polestar's in-house developed bonded-aluminium platform. It will also be the first Polestar to use 800-Volt technology.

Polestar also announced that the Polestar 7 will be a premium compact SUV, targeting the world's fastest growing and most profitable premium segment.

Reinforcing the value of Polestar's asset-light business model, Polestar 7 is planned to be manufactured in Europe.

With production already in place in the USA, South Korea and China, Polestar continues to strengthen its global position with a well-balanced international manufacturing network.

Over time, from Polestar 7 onwards, the company will gradually move from a multi-platform approach to one single architecture, reducing complexity, costs, and investments.

Philipp Römers, Polestar head of design, said: "Polestar is known for its progressive design, with each car standing out and creating its own buzz - so too will Polestar 7.

"It is incredibly exciting to bring Polestar's design ethos to a new segment. Polestar 7 will be everything our customers expect from us, both in terms of design and performance."

Michael Lohscheller, Polestar CEO, said: "With Scandinavian design, performance and a premium brand, Polestar has successfully positioned itself in the global automotive market. We have three outstanding cars on the road and a growing, passionate customer base."

"We are building on the strong Polestar brand with design and performance at its core. But significant changes are needed to make this well-respected progressive brand a successful and viable business.

"We are speeding up our retail expansion and commercial transformation, whilst adjusting our future model line-up and significantly reducing our cost base. Both in terms of volumes and financials, we expect 2025 to be the strongest year in Polestar's history."

Polestar is accelerating its shift to an active selling model, with new retail partners and more retail spaces. Together with its partners, Polestar plans to expand from 70 to 130 and from 36 to 57 retail spaces in Europe and North America. The established direct-to-consumer online sales channel will remain, giving customers a choice in how they want to buy their Polestar.

The changes being made to Polestar's commercial operations are already having a positive impact with a 5.3 per cent increase in retail sales in Q4 2024 and a 37.2 per cent increase in order intake in Q4 2024 compared to the same quarter last year.

Polestar 3 and Polestar 4 represent 56 per cent of order intake in Q4 2024, creating a strong momentum as we enter 2025.

Polestar's new market expansion will now focus on France, with sales starting in 2025. France is one of the largest and fastest growing EV markets in Europe and a natural fit for a premium brand like Polestar.

Additional expansion, across Eastern Europe, Asia and Latin America, is planned from 2026 onwards.

Daniel Donghui Li, Geely Holding Group CEO and a Polestar Board Member, added: "Geely will continue to support Polestar's development and strategy implementation, including working with Polestar to secure additional equity and debt funding.

"Polestar remains an important global asset for Geely and the new leadership team is taking the right actions to transform it from an iconic brand into a successful global business."