Polestar to fire 15 per cent of its workforce

After missing its product sales targets in 2023, electrical vehicle maker Polestar is swinging the axe to cut costs, and reduce its reliance on its owners, Volvo and Geely.

The Sweden-based automaker confirmed to Reuters and Trying to find Alpha that it plans to retrench 450 staff, or about 15 per cent of its workforce. Polestar’s whole headcount is low because of it makes use of an “asset light” technique, with manufacturing completed by Volvo and Geely.

A spokesperson for Polestar instructed the knowledge firm the automaker is “reducing exterior spend and, regrettably, moreover our number of employees”.

The company delivered 54,600 cars in 2023, a small six per cent improve over its 2022 product sales, and correctly beneath the preliminary aim of 80,000, which was later revised proper all the way down to 60,000. Polestar blamed a “tough market” for missing its 2023 targets.

Among the many many challenges confronted by automakers in 2023 have been slowing progress for electrical autos (EVs), and diminished EV subsidies in plenty of jurisdictions. Tesla managed to keep up product sales rising by slashing prices.

In November 2023, Polestar accepted these altering circumstances and outlined a model new near-term plan focussing on its income margins. It moreover secured an extra US$450 million ($685 million) in loans from Volvo and Geely.

CEO Thomas Ingenlath instructed the media Polestar will retain its premium positioning and deal with profitability, which means it couldn’t cut back prices. On the time Polestar was planning to hit spherical 155,000 product sales per 12 months by 2025, down from an earlier aim of 290,000.

Starting life throughout the late Nineties as a racing outfit, the company began tuning Volvo cars throughout the mid-2000s, and was bought out by Volvo in 2015. Two years later, Volvo and Geely launched Polestar would develop to be a standalone mannequin focussing on electrified — later completely electrical — autos.

After merging with a selected goal acquisition agency (SPAC) in June 2022, Polestar has been listed on the tech-focussed Nasdaq stock change. Its share worth has fallen by spherical 80 per cent since then.

Although it is now a public agency, Volvo and Geely private almost 95 per cent of Polestar’s shares.

Polestar at current has two cars in manufacturing, the Volvo XC40-based Polestar 2 high-riding sedan, and the larger Polestar 4 crossover coupe.

The first deliveries of the Volvo EX90-based Polestar 3 are anticipated to begin out throughout the middle of 2024. Every the Polestar 3 and Polestar 4 have been confirmed for Australia.