On April 18, 2023, the Polestar 4 electric SUV was displayed at the 20th Shanghai International Automobile Industry Exhibition held at the National Convention and Exhibition Center (Shanghai) in Shanghai, China.
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Swedish electric car maker Polestar on Wednesday cut its long-term 2025 delivery target and said it would still need to raise cash to break even that year despite cost cuts.
The company also lowered its guidance for the year.
Shares rose about 3% in after-hours trading.
Polaris says Currently, the company is targeting “high-teens” gross margins by 2025, with annual sales of approximately 155,000 to 165,000 vehicles. When it launched its initial public offering last year, Polestar targeted annual sales of about 290,000 vehicles by the end of 2025.
Currently, Polestar expects to deliver “approximately 60,000” vehicles in 2023, at the low end of its previous guidance range, with gross profit margins of about 2%. The company previously estimated that the delivery volume in 2023 will be 60,000 to 70,000 units, with a gross profit margin of 4% for the year.
Polestar’s gross profit margin in the first nine months of 2023 will be 1.1% and 4.9% in 2022. 51,491 vehicles were delivered in 2022.
Polestar also said it is taking additional measures to cut costs.The company has secured $450 million in new loans from its founding investor, Chinese automaker Geely Automobile Holdings and its subsidiaries Volvo Cars. The company currently expects to require approximately $1.3 billion in additional external funding to achieve break-even cash flow in 2025.
Chief Executive Thomas Ingenlath said in a statement: “By taking the necessary steps to reshape our business plan, we are reducing costs and improving efficiency to create a more resilient and profitable Polestar, while reducing our capital requirements.”
The news comes as part of Polestar’s third-quarter earnings report Report.
Polestar’s net loss in the third quarter was US$155.4 million. A year ago, Polestar reported net income of $299.4 million, helped by accounting credits related to a drop in its stock price at the time.
Third-quarter revenue increased to $613.2 million from $435.5 million in the same period last year.
Polestar delivered 13,976 vehicles in the third quarter, an annual increase of 51%, and a total of 41,817 vehicles were delivered in the first nine months of 2023.
At the end of the third quarter, Polestar had $951.1 million in cash and equivalents, down from $1.06 billion as of June 30.
Polestar has confirmed that production of its upcoming large electric SUV, the Polestar 3, is expected to begin in China in the first quarter of 2024 and in the United States next summer. The Polestar 3 is based on a new platform developed by (and shared with) Volvo Cars. The launch was originally expected before the end of 2023, but delays in the platform software (developed by Volvo) pushed it to 2024.
Production of the Polestar 4 small crossover SUV will start as planned in China next week, the company said. Deliveries are expected to begin in China next month and in other parts of the world early next year. Another premium sedan called the Polestar 5 is currently expected to enter production in China by the end of 2024.
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