Polestar cuts margin target and delivery forecast

The EV maker has lowered its delivery target for 2023 to the lower end of its previous forecast of 60,000 to 70,000 electric cars and halved its gross margin target from 4 to 2 per cent. However, there are also positive developments.

Polestar’s turnover increased by 41 per cent to 613.2 million US dollars in the third quarter, compared to 435.4 million in the same period last year. Polestar’s net loss in the third quarter was 155.4 million euros, compared to 299 million in the same period in 2022.

As reported, Polestar delivered 13,976 cars in the third quarter (+51 per cent) – currently, only the Polestar 2 is available to customers. However, deliveries fell slightly compared to Q2 2023 (15,800 cars). The carmaker switched to the revised 2024 model year in the third quarter. However, when Polestar published the Q3 deliveries at the beginning of October, it had confirmed the annual target of 60,000 to 70,000 units.

Together with the 27,841 deliveries from the first half of the year, Polestar has delivered 41,817 units after three quarters. That means at least 18,183 deliveries are needed in the fourth quarter to reach the 60,000 target. Polestar initially expected to hand over 80,000 EVs in 2023, but the Polestar 3 electric SUV presented in 2022 was also due to be delivered this year. When the model was delayed until 2024, Polestar lowered its forecast.

Global economic uncertainty, high interest rates, and the lagging demand for EVs in some markets are not helping Polestar’s situation. The manufacturer stated that it would reduce costs even further to increase the margin in the future. The company expects a gross margin in the high teens for 2025 with a total annual volume of around 155,000 to 165,000 vehicles – including the Polestar 3 and Polestar 4.

There will be no price reductions for the time being. CEO Thomas Ingenlath emphasised that the focus will remain on the premium market rather than the mass market. Polestar wants to increase profitability rather than volume.

Polestar received additional capital through loans from Volvo and Geely. The two shareholders have provided a total of 450 million dollars (420.5 million euros) via term loans with a term until June 2027.

“These actions and these initiatives are done in the context of what is currently a more challenging market environment and that’s reflected in our volume aspirations,” Polestar Chief Financial Officer Johan Malmqvist said in an interview with Reuters.

reuters.com, polestar.com (Q3), polestar.com (credit), volvocars.com (credit)