STOCKHOLM, Sept 3 (Reuters) -

Swedish electric vehicle maker Polestar reported a

wider loss for the second quarter on Wednesday, after tariffs

and intensifying price pressure led to an impairment charge of

its Polestar 3, sending its U.S.-listed shares down 11%.

U.S. trade tariffs on global trading partners have hit the

automotive industry hard, with automakers including Polestar

scrambling to adjust supply chains and shift manufacturing to

mitigate the impact.

Polestar reported a net loss of $1.03 billion for the

quarter ended June 30, compared with a loss of $268 million a

year earlier.

The company slashed the recoverable value of the Polestar 3

to $25 million, leading to a $739 million impairment charge.

Sweden-based Volvo Cars, which produces the

Polestar 3 in its South Carolina factory, also booked a similar

impairment charge in the second quarter related to its ES90 and

EX90 due to tariffs and launch delays.

"We will not grow in the U.S. at any cost, because the

financial exposure is then too high," Polestar said in a

post-earnings call.

The company added that 77% of its sales were generated

from Europe, while 8% came from the U.S. in the first half of

this year.

Like many other EV startups, Polestar has burned through

significant amounts of cash in its push to achieve scale and

consistently faced challenges managing its liquidity as well as

debt levels.

The company initially aimed to reach cash flow break-even by

2025 but adjusted it in January to 2027, before suspending its

forecast due to the uncertainty brought on by tariffs.

While it has long risked breaching certain debt

covenants, the company repeatedly negotiated amendments with its

lenders and said it had agreed with creditors to revise some of

the covenants to remain compliant in the second half of the

year.

Polestar also said it had handed over 177 cars as

collateral, as part of a financing deal.

While a number of startups including

Fisker

,

Lordstown

and

Arrival

have gone under after running out of funds, a few have

backers willing to continue funding loss-making operations.

VinFast's

founder

has kept the Vietnamese EV maker going as it tries to break

even by the end of 2026, while Lucid has received

around

$8 billion

in investments from Saudi Arabia's Public Investment Fund.

Meanwhile, Volkswagen's $5.8 billion

investment

in Rivian has been seen as a lifeline for the U.S.

startup.

Polestar

secured a $200 million equity investment from Geely owner Li

Shufu through PSD Investment in June.