Q1 2026 just dropped and it’s a total disaster. Revenue was essentially flat year-on-year despite selling 7% more cars, meaning they’re charging less per vehicle in an increasingly brutal market.
Then it gets worse.
Gross margin is now negative. A significant-3.2%. They are literally losing money on every car before a single dollar of overhead is counted. A year ago that margin was +10.3%. That’s a 13.5 percentage point cliff-dive in 12 months.
The net loss more than doubled to $383 million. In one quarter. Adjusted EBITDA losses nearly tripled to $235 million. They entered Q1 with $1.16 billion in cash, raised another $700 million in fresh equity during the quarter, and still ended with only $676 million. Do that math. They consumed well over $1 billion in three months.
The only reason this company still exists is that Geely and Volvo keep converting loans to equity instead of demanding repayment, essentially subsidising losses indefinitely because letting it fail would be more embarrassing. $639 million in debt was just wiped off the books this way. That’s not a turnaround, that’s a parent propping up a zombie.
The CEO’s response? More models. A “product offensive.”
The new PS4 variant comes late 2026, a new PS2 in 2027, a compact SUV in 2028. Sounds great to the uninitiated.
Except they’re burning through cash fast enough that getting to 2028 requires everything to go right in an environment defined by tariffs, pricing wars, and FX headwinds.
Michael is failing and needs to leave.
