Sustainability: Polestar's Plan to Manufacture a Net Zero EV

Swedish electric vehicle manufacturer Polestar has reported a 31% reduction in emissions per vehicle sold since 2020.

The emissions reduction, it says, resulted from increased renewable energy use in battery production and manufacturing facilities and from the adoption of low-carbon materials.

A rise in clean energy on European electricity grids also contributed to lower emissions per vehicle.

The company aims to produce a net zero electric vehicle without carbon offsets by 2035.

"Electrification delivers clear value for customers: lower running costs, lower emissions and greater peace of mind, as volatile oil prices and fuel scarcity mean pump anxiety is increasingly replacing range anxiety," says Michael Lohscheller, CEO at Polestar.

Internal carbon pricing mechanism

Polestar implemented an internal shadow price of carbon in 2022 to support material footprint reduction efforts. This hypothetical cost per tonne of CO₂-equivalent functions as an analytical tool in business case evaluations.

The company uses this metric to compare options with different emission profiles and prioritise decarbonisation measures. Polestar states that this internal carbon price does not involve any fee or fund transfer and will not be disclosed publicly.

The manufacturer also uses blockchain technology to improve traceability of raw materials. This includes cobalt, mica, nickel and lithium.

"As clean electricity scales, electric vehicles are becoming not just the sustainable choice, but the smarter, more reliable one," Michael adds.

Materials research and development

Manufacturing electric vehicles still generates emissions through material extraction and supply chain operations. Steel and lithium, both key components in EV production, rank among the most carbon-intensive materials in the automotive sector.

Polestar launched its Mission 0 House facility in Gothenburg in 2024 to develop zero-emission materials and processes.

The facility works on four areas:

• A large-scale pilot for ultra-low-emission steel.
• Research on materials for batteries.
• The development of bio-based textile alternatives.
• Technologies to convert CO₂ into new materials.

"The Polestar 0 project pushes us into new territory," says Fredrika Klarén, Head of Sustainability at Polestar. 

“While much of the industry invests in hybrids and combustion engines, we focus on solutions that eliminate emissions entirely.

"The innovation emerging from this project shows the power of collaboration and material science, and importantly, how well positioned we are to move the industry forward."

Production growth with emissions reduction

Polestar reported 34% growth in 2025 sales, with more than 60,000 vehicles sold despite challenging market conditions. The company also recorded a 50% increase in revenue for 2025 compared with the prior 12 months.

According to Polestar, the adjusted post-tax loss reduced to US$783m, a US$297m year-on-year improvement, the company reported. 

"If you are not reducing emissions while growing, you are choosing not to," Michael says.

The performance comes as the company expands its presence across key markets while maintaining its environmental commitments.

Polestar emphasised its dedication to improving resource efficiency and promoting a circular economy.

Pursuing circular materials, modular and mono-material designs supports high-value recovery and quality recycling.

This approach is essential not only for reducing environmental impact but also for maintaining the value of the cars and their key components and for seizing circular business opportunities throughout their lifecycle.