Despite facing regulatory hurdles in the US and struggling sales, Polestar has announced its latest addition to its electric vehicle lineup: the Polestar 7 compact SUV. The Sweden-based manufacturer revealed the new model during a business update on Thursday, but provided few details about the vehicle, including its production timeline and location in Europe.

The Polestar 7 is touted as a "very progressive SUV" with a "strong USP" (unique selling point), according to CEO Michael Lohscheller. The company is entering the compact SUV segment, which is currently the largest and fastest-growing segment in the world. Lohscheller expressed confidence that the Polestar 7 will embody the company's DNA, but did not elaborate on what that means in terms of features or design.

Notably, the business update did not address Polestar's regulatory troubles in the US, where the company faces a potential ban due to its use of connected vehicle software from China. The Biden administration recently finalized a ban on such software, which Polestar claims would "effectively prohibit" it from selling EVs in the US. The company's silence on the matter may be a reflection of the challenges it faces in the US market, where EV sales have slowed due to high prices, charging challenges, and politics.

Instead, Polestar is shifting its focus to other markets, including France, which is one of the fastest-growing markets for EVs. This marks a significant shift in the company's strategy, which had previously been focused on the US market with the Polestar 3, a three-row SUV manufactured in South Carolina to qualify for generous incentives under the Biden administration.

Polestar's earnings report, also released on Thursday, painted a mixed picture. The company reported a $323 million net loss and sold 12,548 cars, down 8 percent compared to its Q3 sales in 2023. However, Lohscheller predicted "positive" adjusted earnings for 2025 and free cash flow in 2027, citing the company's focus on cost reduction and increasing efficiency.

Despite the challenges, Lohscheller expressed optimism about Polestar's future, calling 2024 a "transitional year" for the company. With the right cars, distribution, and cost structure in place, he believes Polestar is well-positioned to succeed in 2025 and beyond. However, the company's ability to overcome its regulatory hurdles in the US and regain momentum in the market remains to be seen.

The Polestar 7 announcement and earnings report come at a critical time for the company, as it navigates the complex landscape of EV regulation and market trends. As the industry continues to evolve, Polestar's ability to adapt and innovate will be crucial to its survival and success.