Polar Power, Inc. (POLA): Business Model Canvas [Dec-2025 Updated]

You're looking for the real story behind Polar Power, Inc.'s (POLA) operations, and after two decades analyzing power plays, I can tell you this canvas paints a clear picture: they are overwhelmingly tethered to major U.S. telecom customers, who drove 92% of their Q2 2025 net sales, even as they push into EV charging and international markets. Honestly, the near-term focus is on operational grit-rolling out SAP and restructuring US sales channels-while high-margin aftermarket parts and service already account for 28% of their Q1 2025 revenue, which is key when TTM revenue sits at $11.96 Million USD. Dig into the details below to see exactly how their proprietary DC technology is being monetized and where the near-term risks, like raw material inflation, are hitting their cost structure.

Polar Power, Inc. (POLA) - Canvas Business Model: Key Partnerships

You're looking at the structure of Polar Power, Inc. (POLA) partnerships as of late 2025. It's a mix of trying to secure future revenue from existing large accounts while aggressively rebuilding the sales footprint, especially internationally, all while navigating commodity cost pressures.

Telecom Customer Remote Monitoring

The largest customer relationship is central to the aftermarket strategy. Polar Power, Inc. was working with its telecom customer to implement monitoring equipment on legacy units during the first quarter of 2025.

• The plan, announced in May 2025, was to jointly implement this remote monitoring system on over 5,000 legacy units during the next twelve months.
• This initiative is specifically targeted to generate additional aftermarket parts and service revenue.
• Sales to telecom customers represented 82% of total net sales in Q1 2025, slightly down from 92% in Q2 2025, but the largest U.S. telecom customer alone accounted for 63% of total net sales for the three months ended September 30, 2025.
• Sales of aftermarket parts and services were 28% of total net sales in Q1 2025, and saw a roughly 288% increase in Q2 2025 compared to the same period in 2024.

Sales Channel Restructuring and International Expansion

Management sees restructuring the US sales approach through domestic resellers as the fastest way to return to pre-pandemic sales levels. Simultaneously, international expansion efforts are underway.

The international sales erosion is stark when comparing Q3 2025 to Q3 2024: international sales were nil% of net sales for the three months ended September 30, 2025, compared to 10% in the same period in 2024.

LPG Fuel Distributor Collaboration

Polar Power, Inc. is actively engaging with LPG fuel distributors to market its microgrid solutions.

• Active participation from LPG fuel distributors is noted in assisting with marketing microgrids, such as the system installed for the UNHCR in Nigeria, to their customer base.
• The company added heat recovery to its microgrid systems to increase fuel-to-useful-energy conversion.

Raw Material Suppliers and Tariff Impact

Suppliers of key raw materials, particularly copper, are impacted by recent trade policy changes and inflation.

The company has one long-term contract with its largest customer that expires at the end of 2025, which Polar Power, Inc. plans to renegotiate to lessen the impact of tariffs on material costs. Tariffs and inflation are driving up the cost of copper.

A potential 50% import tariff on copper was announced, with an implementation date of August 1, 2025, though refined copper products were later exempted from the 50% duty, with tariffs only applying to semi-finished copper goods starting that date. COMEX copper futures plunged over 17% following the announcement of the refined copper exemption. Finance: draft 13-week cash view by Friday.

Polar Power, Inc. (POLA) - Canvas Business Model: Key Activities

You're looking at the core actions Polar Power, Inc. (POLA) is taking to run and grow the business right now, focusing on the hard numbers we have through Q3 2025.

Manufacturing and assembly of DC advanced power and cooling systems

The physical production of DC advanced power and cooling systems remains central, though capacity utilization is a near-term challenge. The company has stated the potential to produce products exceeding $50 million in revenue per year, provided bookings materialize. To support this, as of Q1 2025, Polar Power, Inc. was holding approximately $13 million of raw materials inventory. However, Q3 2025 results show the strain of fixed costs; the cost of sales as a percentage of net sales spiked to 277.5% for the three months ended September 30, 2025, resulting in a gross loss of $(2,260,000). This compares sharply to Q3 2024, where the gross profit as a percentage of net sales was a healthy 29%. The primary driver for the Q3 2025 gross loss was increased factory overhead absorption and underutilization of the factory.

Restructuring and expanding the global sales and distribution organization

Polar Power, Inc. is actively shifting its sales approach to rebuild revenue, which saw net sales of only $2.7 million in Q2 2025, a 42% decline year-over-year. Since January 1, 2025, the company has been restructuring its sales staff in the Middle East and Africa, adding personnel and establishing overseas resellers. They are also restructuring US sales to include distribution through domestic resellers. This international push is notable, as sales to customers outside of the U.S. were only 3% of total net sales in Q2 2025, down from 25% in Q2 2024, though Q1 2025 showed a higher international sales mix at 18% of total net sales. The telecom market still dominates, accounting for 92% of total net sales in Q2 2025. A concrete recent win is the initial purchase order for 50 units of the EVMC30K mobile charger, and the company is negotiating a 2-year distribution agreement for the sales and service of these mobile chargers.

Research and development (R&D) for new products like the 30 kW mobile EV charger

R&D is focused on product diversification, specifically the 30 kW mobile EV charger, which the company planned to release in the fourth quarter of 2025. This EVMC30K unit delivers up to 30 kW of Level 3 fast charging. R&D spending reflects this focus, though it has been reduced recently. For the three months ended September 30, 2025, R&D expenses were $157,000, a 9% decrease from the $172,000 spent in the same period in 2024. The TTM (trailing twelve months) annual R&D as of late 2025 stands at $663K, down from the 2024 annual figure of $771K. They plan to recruit additional engineers in 2026 to support new developments.

Providing high-margin aftermarket parts and service for existing large equipment fleets

This area shows significant success as a counterpoint to sluggish genset sales. The focus on the large installed base of legacy equipment is paying off. Sales of aftermarket parts and services grew by roughly 288% in Q2 2025 compared to Q2 2024. Furthermore, in Q1 2025, aftermarket parts and services represented 28% of total net sales, which is a higher-margin revenue stream. To build on this, Polar Power, Inc. planned to jointly implement remote monitoring on over five thousand legacy units during the twelve months following Q1 2025 to drive further service revenue.

Implementing the SAP ERP system for operational efficiency

The implementation of a companywide ERP system, specifically SAP, is a key activity driving internal improvements. Benefits were already being seen in Q1 2025, where the system helped streamline manufacturing operations. This directly contributed to improving labor efficiencies and reducing manufacturing lead times. The company currently has approximately $13 million in raw materials inventory, which the improved system helps manage to reduce cash burn.

You should track the utilization rate against that $50 million potential to see if the SAP implementation is translating to better absorption of factory overhead.

Polar Power, Inc. (POLA) - Canvas Business Model: Key Resources

You're looking at the core assets Polar Power, Inc. (POLA) relies on to execute its business plan. These aren't just line items; they are the tangible and intellectual foundations of their operations right now.

The intellectual property base centers on the proprietary DC advanced power and cooling system technology and patents. This technology underpins their product portfolio, which serves telecom, military, renewable energy, marine, automotive, residential, commercial, oil field, and mining applications. The company is also pushing mobile rapid battery charging technology and hybrid propulsion systems.

The physical capacity is significant. Polar Power, Inc. has manufacturing capacity capable of producing over $50 million in annual revenue, assuming sufficient bookings are in place. That's the ceiling they are working toward with their current setup. To support this, they held a significant raw materials inventory, approximately $13 million as of Q1 2025, which helped reduce cash burn at that time. What this estimate hides is the Q3 2025 inventory situation, where write-downs of $1,967,000 were taken on slow-moving engine inventory, showing the risk inherent in holding large stocks.

The human capital resource is the specialized engineering and technical staff necessary to maintain and advance the DC power solutions. Their focus on product upgrades and remote monitoring suggests a highly skilled team is required to manage the installed base.

The existing fleet of legacy units provides a base for aftermarket service revenue. This is a critical, recurring revenue component. For instance, in Q1 2025, sales of aftermarket parts and services represented 28% of total net sales. The company planned to jointly implement a remote monitoring system on over five thousand legacy units during the twelve months following Q1 2025 to boost this service revenue stream.

Here's a quick look at how the Q1 2025 operational metrics tie into resource utilization:

The concentration of the installed base also dictates where engineering and service resources are deployed. The customer base heavily influences the resource allocation for these key assets. For example, Q1 2025 sales breakdown shows:

• Sales to telecom customers: 82% of total net sales.
• Sales to military customers: 17% of total net sales.
• Sales to international markets: 18% of total net sales.

Still, the customer mix shifted by Q2 2025, which would impact resource deployment for the next period:

• Sales to telecom customers: 92% of total net sales.
• Sales to military customers: 6% of total net sales.

Finance: draft 13-week cash view by Friday.

Polar Power, Inc. (POLA) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Polar Power, Inc. (POLA) systems, based on what they were reporting through the third quarter of 2025. The value is heavily concentrated in serving specific, demanding power needs.

The primary value proposition centers on providing highly reliable, fuel-efficient DC power for off-grid or bad-grid environments, which is clearly reflected in the customer concentration. During the second quarter of 2025, sales to telecom customers, who operate in these environments, represented 92% of total net sales. This reliance shows where the perceived reliability value is highest.

For the telecom sector, the value includes significant cost savings on installation and site leases. While specific dollar savings aren't quantified in the latest reports, the focus on this segment is clear. For military applications, the value is in compact, lightweight, fuel-efficient power. Military customer sales grew to account for 6% of total net sales in Q2 2025, up from 3% in Q2 2024.

The technology supporting these propositions is showing traction in service and diversification. The company experienced increased sales in aftermarket parts and services of roughly 288% in Q2 2025 compared to the same period in 2024. In the first quarter of 2025, these higher-margin aftermarket sales alone represented 28% of total net sales.

The push into new areas is also a stated value. Polar Power, Inc. planned to release its 30 kW mobile EV charger during the fourth quarter of 2025, targeting the mobile rapid battery charging technology for emergency roadside EV assistance segment. Furthermore, a plan was in place to jointly implement a remote monitoring system on over five thousand legacy units over the twelve months following Q1 2025, aiming to improve uptime and generate service revenue.

The systems are designed for configuration across diverse energy sources, including photovoltaics, diesel, and LPG, as evidenced by the mention of microgrids for the UNHCR in Nigeria utilizing LPG fuel distributors for marketing assistance.

Here's a quick look at how the revenue streams were distributed across key segments in Q2 2025:

The company is actively working to rebuild its sales mix, as international sales dropped to 3% of total net sales in Q2 2025 from 25% in Q2 2024.

Finance: draft 13-week cash view by Friday.

Polar Power, Inc. (POLA) - Canvas Business Model: Customer Relationships

You're looking at the core of Polar Power, Inc.'s (POLA) customer dynamic as of late 2025, which is heavily weighted toward one major player, though the company is actively trying to diversify through service revenue and channel partners. Here's the breakdown of how they interact with their customer base.

Dedicated, long-term contract relationship with the largest U.S. telecommunications customer

The relationship with the largest U.S. telecommunications customer defines Polar Power, Inc.'s revenue concentration. For the three months ended September 30, 2025, sales to this single Tier-1 U.S. telecommunications customer accounted for 92% of total net sales. Year-to-date (YTD) sales through September 30, 2025, were similarly concentrated at 89%. The company noted that a steady decline in excess inventory at this customer was reflected by higher bookings toward the end of Q1 2025. However, a key risk noted is the absence of long-term contract commitments, which contributes to revenue volatility.

You can see the customer concentration clearly here:

Direct sales and service for high-margin aftermarket parts and product upgrades

The push for higher-margin revenue is clearly visible in the aftermarket segment. During the second quarter of 2025, sales in aftermarket parts and services saw a massive increase of roughly 288% compared to the same period in 2024. For the first quarter of 2025, these high-margin services represented 28% of total net sales. The company is actively contacting second and third-tier users to promote product upgrades and repairs.

Joint implementation of remote monitoring systems with key customers for improved uptime

Polar Power, Inc. is embedding its service relationship deeper with key customers through technology. During Q1 2025, the company jointly worked with its telecom customer to implement monitoring equipment on legacy units to report performance and maintenance data. The plan, as of Q1 2025, was to jointly implement this remote monitoring system on over five thousand legacy units during the subsequent twelve months. This initiative is specifically expected to generate additional aftermarket parts and service revenue.

Restructuring to a distribution model for US sales, relying on domestic resellers

To rebuild sales momentum, Polar Power, Inc. began a significant channel shift. Starting from January 1, 2025, the company has been restructuring its US sales approach to include distribution through domestic resellers. Management believes this move is the fastest direction for rebuilding sales toward pre-pandemic levels. This restructuring effort is happening concurrently with international restructuring, where they added personnel and established resellers overseas starting in January 2025.

Direct engagement with first-time customers evaluating product integration

The company is actively pursuing new customer acquisition, even amidst the existing concentration. During the first quarter of 2025, Polar Power, Inc. received orders and shipped products to first time customers who are currently evaluating and integrating their products into their operations. This is happening alongside new product introductions, such as receiving an initial purchase order for fifty (50) next-generation model EV mobile chargers in November 2025.

Finance: draft 13-week cash view by Friday.

Polar Power, Inc. (POLA) - Canvas Business Model: Channels

You're looking at how Polar Power, Inc. (POLA) gets its DC power solutions into the hands of customers as of late 2025. The channel strategy is clearly focused on the core telecom business while attempting a significant pivot toward domestic resellers and international growth, though the latter has seen recent contraction.

Direct sales force efforts remain heavily concentrated on the largest domestic accounts. For the three months ended September 30, 2025, sales to the Company's largest telecommunication customer in the U.S. accounted for 63% of total net sales. This single customer relationship is significant, especially since that long term contract expires at the end of year 2025, which Polar Power, Inc. plans to renegotiate. Military sales, while smaller, are a distinct channel; a $674,000 contract for compact DC generators was announced on October 28, 2025, validating this direct sales approach for defense applications. The historical sales strategy involved using local regional sales managers to demonstrate products to Tier-1 telecommunications providers.

The push for broader US market penetration is leaning on a shift in structure. The Chairman and CEO stated in August 2025 that restructuring US sales to include distribution through domestic resellers is seen as the fastest direction for rebuilding sales. This suggests a move away from pure direct sales reliance, supported by plans to expand the dealer network generally.

International channels have seen volatility. For the three months ended September 30, 2025, international sales represented nil% of net sales, a sharp drop from 10% in the same period in 2024. However, the company has been actively restructuring its sales staff in the Middle East and Africa by adding new personnel and establishing resellers overseas since January 1, 2025. This restructuring is directly linked to increasing the number of field trials for DC generators in new markets like South East Asia and Africa telecoms. A specific field trial in Sudan restarted in August 2025. Furthermore, LPG fuel distributors are actively participating in marketing microgrids, such as those installed for the UNHCR in Nigeria.

Direct-to-customer sales for aftermarket support is a high-margin channel showing strong growth. For the first quarter of 2025, sales of aftermarket parts and services represented 28% of total net sales. This segment saw increased sales of roughly 288% in Q2 2025 compared to Q2 2024. The company is focused on driving this revenue stream by planning to jointly implement a remote monitoring system on over five thousand legacy units over the twelve months following Q1 2025.

Here's a quick look at the channel revenue mix based on the latest reported quarterly data:

The company's channel structure is undergoing active modification, especially in the US, where the CEO noted the belief that restructuring to include domestic resellers is key. The international segment is clearly being rebuilt from a near-zero base in Q3 2025, with new personnel and resellers established in the Middle East and Africa since the start of 2025. The focus on aftermarket sales shows a commitment to recurring revenue from the installed base.

• New military contract value announced: $674,000 (October 2025).
• Planned remote monitoring implementation: Over 5,000 legacy units.
• International sales percentage in Q3 2024: 10%.
• International sales percentage in Q3 2025: nil%.

Finance: draft 13-week cash view by Friday.

Polar Power, Inc. (POLA) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Polar Power, Inc. as of late 2025, based on the most recent reported figures. The customer mix shows a heavy reliance on one sector, but there are clear diversification efforts underway, especially in mobile power solutions.

The customer segments are clearly defined by the revenue they generate, which gives you a snapshot of where the business is focused right now.

The telecom segment remains the overwhelming driver of revenue, though its share slightly decreased from 95 percent in Q2 2024 to 92 percent in Q2 2025. To be fair, the concentration risk is high; for the three months ended September 30, 2025, the largest single customer in the U.S. telecom market accounted for 63% of total net sales.

You can see the military segment doubled its contribution year-over-year in Q2 2025, moving from 3 percent to 6 percent of net sales. This is supported by the news of a military contract received in October 2025.

The other established segments, which include commercial, oil field, mining, and marine applications, held steady at 2 percent of net sales in Q2 2025, the same as in Q2 2024.

Polar Power, Inc. is actively targeting new customer groups with specific product rollouts, signaling a push for diversification outside the core telecom business:

• Electric Vehicle (EV) charging providers and roadside assistance services: Polar Power plans to release its 30 kW mobile EV charger during the fourth quarter of 2025. The company also received a Purchase Order for Mobile Electric Vehicle Fast Chargers to Address the Growing Need for Emergency Roadside Assistance as of November 2025.
• Residential and commercial users seeking micro/nano grid solutions: The company is seeing active participation from LPG fuel distributors helping market its microgrids, such as the one installed for the UNHCR in Nigeria, to their customer base.

It's also worth noting the geographic split, which shifted significantly. Sales to customers outside of the U.S. represented only 3% of total net sales in Q2 2025, down sharply from 25% in Q2 2024. By Q3 2025, net sales to customers in the U.S. accounted for 100% of total net sales, with international sales at nil%.

Finance: draft 13-week cash view by Friday.

Polar Power, Inc. (POLA) - Canvas Business Model: Cost Structure

You're looking at the expenses that drive Polar Power, Inc. (POLA)'s operations as of late 2025. It's a structure showing significant one-time hits and ongoing pressures from the macro environment.

The high cost of sales is immediately apparent, heavily skewed by a major non-recurring charge in the third quarter. For the three months ended September 30, 2025, Polar Power, Inc. recorded inventory write-downs totaling $1,967,000 to adjust inventory to its net realizable value. This single event contributed significantly to the cost structure challenges in Q3 2025, which the outline highlights as a $1.97 million inventory write-down.

Manufacturing and material costs remain a pressure point. The company explicitly notes that geopolitical and tariff issues are driving up the cost of copper, a key material. This inflation and the tariff environment hurt Polar Power, Inc. when competing overseas against manufacturers with lower sourcing costs, and domestically against competitors with higher production volume efficiencies that offset their own tariff costs.

Looking at overhead, operating expenses showed some control in the second quarter. For the three months ended June 30, 2025, operating expenses declined by 24% to $1.0 million, down from $1.4 million in the same period of 2024. However, the Q3 2025 results show a more complex picture, with total operating expenses at $1,617,000 (in thousands) for the quarter, which included a $455,000 impairment charge related to right-to-use assets and lease deposits.

Financing costs are a fixed drain. For the third quarter of 2025, interest expense and finance costs amounted to $208,000. This expense was primarily due to interest on the amount borrowed from its line of credit with Pinnacle Bank.

Investment in future products, while scaled back recently, is still present. Research and development expenses for the three months ended September 30, 2025, were $157,000. This represented a slight decrease of 9% or $15,000 compared to the $172,000 spent in the same period of 2024, mainly due to reduced support staff and consulting services.

Here's a quick look at some of the key cost components for the third quarter of 2025 compared to the prior year period, keeping in mind that figures are in thousands of U.S. Dollars:

The cost structure is clearly sensitive to volume, as fixed costs related to plant and administrative expenses were not fully absorbed when shipments fell below a certain threshold. This dynamic is exacerbated by the inventory issue.

• Cost of sales as a percentage of net sales spiked to 277.5% in Q3 2025, up from 71% in Q3 2024.
• General and administrative expenses for Q3 2025 were $807,000 (in thousands), a decrease of 16% from Q3 2024.
• Sales and marketing expenses for the nine months ended September 30, 2025, were $443,000 (in thousands).
• The company's Q3 2025 net sales were only $1.3 million.

Polar Power, Inc. (POLA) - Canvas Business Model: Revenue Streams

Polar Power, Inc.'s revenue streams center on the sale of its core DC generators and advanced power systems, which form the bulk of its product sales. For the first quarter of 2025, net sales totaled $1.7 million. The latest quarterly figure available, for the three months ended September 30, 2025, showed net sales of $1.273 million, a 74% decline year-over-year.

The overall financial scale is captured by the Trailing Twelve Months (TTM) revenue as of late 2025, which stands at $11.96 Million USD. This compares to the full-year 2024 revenue of $13.97 Million USD.

Here's a look at the composition of revenue streams based on recent reporting periods:

Aftermarket parts and services represent a critical, higher-margin component of the revenue base. This segment accounted for 28% of Polar Power, Inc.'s total net sales in the first quarter of 2025. The focus on this area is showing growth; for instance, sales in this category saw an approximate 288% increase in the second quarter of 2025 compared to the same period in 2024.

The core product revenue, derived from sales of DC generators and advanced power systems, made up the remaining portion of the Q1 2025 sales. In 2024, this product category represented 70.54% of total revenue. The company is actively working to diversify this product revenue base.

New revenue streams are emerging from product diversification efforts. Polar Power, Inc. has received a purchase order for its new mobile EV fast chargers. The Chairman and CEO indicated plans to release the 30 kW mobile EV charger during the fourth quarter of 2025.

A smaller, but consistent, revenue source is engineering and technical support services. This component represented 1.10% of total revenue in 2024. The company expects future aftermarket revenue from implementing remote monitoring systems on legacy units.

• Sales to telecom customers dominated Q2 2025, representing 92% of total net sales.
• International sales represented 18% of total net sales in Q1 2025, up from 6% in Q1 2024.
• Military customer sales were 17% of total net sales in Q1 2025.

Finance: review the Q3 2025 gross margin impact from inventory write-downs against the Q4 2025 EV charger launch projections by next Tuesday.