Polestar to fireplace 15 per cent of its workforce

After lacking its gross sales targets in 2023, electrical automobile maker Polestar is swinging the axe to chop prices, and scale back its reliance on its homeowners, Volvo and Geely.

The Sweden-based automaker confirmed to Reuters and Looking for Alpha that it plans to retrench 450 employees, or about 15 per cent of its workforce. Polestar’s total headcount is low as a result of it makes use of an “asset gentle” strategy, with manufacturing carried out by Volvo and Geely.

A spokesperson for Polestar informed the information company the automaker is “lowering exterior spend and, regrettably, additionally our variety of workers”.

The corporate delivered 54,600 automobiles in 2023, a small six per cent improve over its 2022 gross sales, and nicely beneath the preliminary goal of 80,000, which was later revised all the way down to 60,000. Polestar blamed a “difficult market” for lacking its 2023 targets.

Among the many challenges confronted by automakers in 2023 have been slowing development for electrical automobiles (EVs), and decreased EV subsidies in lots of jurisdictions. Tesla managed to maintain gross sales rising by slashing costs.

In November 2023, Polestar accepted these altering situations and outlined a brand new near-term plan focussing on its revenue margins. It additionally secured a further US$450 million ($685 million) in loans from Volvo and Geely.

CEO Thomas Ingenlath informed the media Polestar will retain its premium positioning and focus on profitability, which means it will not lower costs. On the time Polestar was planning to hit round 155,000 gross sales per 12 months by 2025, down from an earlier goal of 290,000.

Beginning life within the late Nineteen Nineties as a racing outfit, the corporate started tuning Volvo automobiles within the mid-2000s, and was purchased out by Volvo in 2015. Two years later, Volvo and Geely introduced Polestar would develop into a standalone model focussing on electrified — later totally electrical — automobiles.

After merging with a particular objective acquisition firm (SPAC) in June 2022, Polestar has been listed on the tech-focussed Nasdaq inventory alternate. Its share value has fallen by round 80 per cent since then.

Though it’s now a public firm, Volvo and Geely personal virtually 95 per cent of Polestar’s shares.

Polestar at the moment has two automobiles in manufacturing, the Volvo XC40-based Polestar 2 high-riding sedan, and the bigger Polestar 4 crossover coupe.

The primary deliveries of the Volvo EX90-based Polestar 3 are anticipated to begin across the center of 2024. Each the Polestar 3 and Polestar 4 have been confirmed for Australia.