Electric vehicle manufacturer Polestar reduces employees and production forecasts

STOCKHOLM: Swedish electric vehicle (EV) creator Polestar brought down its 2023 creation direction on Thursday and said it would cut headcount by 10%, refering to a deferred creation start for its Polestar 3 and a difficult climate for the business.

The automaker said that instead of predicting 80,000 cars this year, it now expects to produce between 60,000 and 70,000 of them.

It has been a challenging quarter for EV startups, who are increasingly up against more established brands and new Chinese players. In addition to high interest rates, Tesla's ongoing price war and other factors have further strained already-strained startups.

Polestar companions, for example, Clear and Fisker, have both cut their creation gauges, with Clear in Spring likewise managing 18% of its labor force.

Instead of beginning production in the middle of 2023, Polestar stated that it would delay it until the first quarter of 2024. The company claimed that Volvo Cars, which manufactures cars and is delaying its own EX90, needed to complete additional software development and testing.

At the end of the first quarter, cash and cash equivalents totaled $884.3 million, up from $973.9 million in the previous three months. Compared to the loss of $257.9 million a year ago, the operating loss was $199.4 million less.

Stresses of money running out have been an overarching issue with EV new businesses, where numerous players have seen their underlying business sector valuations dissipate, with few choices for subsidizing in a violent economy.

After receiving $1.6 billion in financing in November from its two largest shareholders, Volvo Cars and PSD Investment, which is controlled by Li Shufu, Polestar has previously stated that it has sufficient funds to see it through 2023. However, it will still require additional funding to get through the following few years.

In pre-market trading, Polestar's shares were down more than 6%.