A Polestar 4 electric SUV is displayed during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai) on April 18, 2023 in Shanghai, China.
VCG | Visual Group China | Getty Images
Swedish electric vehicle maker Polestar on Wednesday lowered its long-held delivery target for 2025 and said that despite cost cuts it will still need to raise cash to break even that year.
The company also reduced its guidance for the current year.
Shares were up about 3% in after-hours trading.
Polestar said it is now targeting a gross profit margin “of the order of 15%” for 2025, with a total annual volume of around 155,000 to 165,000 vehicles. At the time of its IPO last year, Polestar targeted annual sales of around 290,000 vehicles by the end of 2025.
For 2023, Polestar now expects to deliver “around 60,000” vehicles, which is at the low end of its previous forecast range, with a positive gross margin of around 2%. The company previously forecast deliveries of between 60,000 and 70,000 vehicles in 2023, with a gross margin of 4% for the year.
Polestar’s gross margin was 1.1% in the first nine months of 2023 and 4.9% in 2022. It delivered 51,491 vehicles in 2022.
Polestar also said it was taking additional steps to reduce costs. It received $450 million in new loans from its founding investors, Chinese automaker Geely Automobile Holding and its subsidiary Geely. Volvo cars. The company now expects to need approximately $1.3 billion in additional external financing to break even in 2025.
“By taking the necessary steps to rework our business plan, we are reducing costs and improving efficiencies to create a more resilient and profitable Polestar – and at the same time reducing our financing needs,” said CEO Thomas Ingenlath in a press release.
The news comes as part of Polestar’s third quarter results. report.
Polestar’s net loss for the third quarter was $155.4 million. A year ago, Polestar reported net income of $299.4 million, thanks to an accounting credit related to its stock price decline at the time.
Third-quarter revenue increased to $613.2 million from $435.5 million for the same period last year.
Polestar delivered 13,976 vehicles in the third quarter, up 51% from last year, and a total of 41,817 vehicles in the first nine months of 2023.
Polestar had $951.1 million in cash and equivalents at the end of the third quarter, up from $1.06 billion as of June 30.
Polestar has confirmed that its upcoming Polestar 3, a large electric SUV, is set to begin production in China in the first quarter of 2024 and in the United States in the summer of next year. The Polestar 3 is based on a new platform developed by (and shared with) Volvo Cars. It was initially planned before the end of 2023, but delays in the platform’s software, developed by Volvo, pushed it back to 2024.
Production of the Polestar 4, a smaller crossover SUV, will begin in China next week as planned, the company said. Deliveries are expected to begin in China next month and to the rest of the world early next year. An additional model, a premium sedan called Polestar 5, is expected to enter production in China by the end of 2024.