Procurement Power: Polestar’s Path to a Net Zero Vehicle

Electric vehicle manufacturers face a challenge from carbon-intensive materials in their supply chains. Steel and lithium production generates substantial emissions despite the lower lifecycle footprint of EVs compared with internal combustion engines.

Polestar is working to address these material emissions. The Swedish carmaker aims to produce a net zero car without 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.

The company reduced its emissions through increased renewable energy use in battery production and manufacturing. Low-carbon material selection also contributed to the reduction.

Internal carbon pricing model

Polestar implemented a shadow price of carbon in 2022 to support decision-making around material footprint reduction. The hypothetical cost per tonne of CO₂-e functions as an analytical tool in assessments and business cases.

The company uses this internal carbon price to compare options with different emission profiles and prioritise decarbonisation actions. Polestar says the price is strictly for decision support and does not involve any internal fee or transfer of funds.

The carmaker does not publicly disclose this price. Clean energy expansion on European grids contributed to Polestar's emissions reduction.

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

Blockchain for material traceability

The company uses blockchain technology to improve traceability of raw materials. Cobalt, mica, nickel and lithium can be tracked through this system.

According to Polestar, the company reported 34% growth in 2025 sales despite challenging market conditions. Robust sales of more than 60,000 vehicles could suggest that its focus on zero-emission mobility was gaining traction among buyers.

This was coupled with a 50% increase in revenue for 2025 compared with the prior 12 months, which helped reduce the adjusted post-tax loss 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.

Research facility for zero-emission materials

Polestar launched its Mission 0 House in Gothenburg in 2024 to develop zero-emission materials and processes. The facility supports the company's mission of producing a net zero EV.

Mission 0 House is working on:

• 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."

Circular economy approach

Polestar emphasised its dedication to improving resource efficiency and promoting a circular economy. Circular materials, modular and mono-material designs support high-value recovery and quality recycling.

This approach could be essential for reducing environmental impact. It also maintains the value of the cars and their key components.

The company views this as an opportunity to seize circular business opportunities throughout vehicle lifecycles. Polestar's inclusion in Sustainability Magazine's 2025 Top 250 World's Most Sustainable Companies list accompanied its environmental work.

The company continues to expand its presence across key markets while maintaining its environmental commitments.