Polestar said on Friday it expects a positive gross profit margin in the fourth quarter, despite a 14% drop in third-quarter electric vehicle (EV) deliveries, sending the Swedish company's share down more than 6% in premarket trading.
Polestar, which is majority owned by China's Geely, has been grappling like rival EV makers with weakening demand for its vehicles owing to factors such as high interest rates, prompting consumers to pivot to cheaper hybrid cars.
Polestar recently went through a major reshuffle where it replaced its CEO, head of design, chair of the board and appointed a new CFO.
New CEO Michael Lohscheller, in his first public statement since taking over on October 1, said on Friday it was conducting a review of its strategy and operations, with an update to be provided on January 16 along with its third-quarter financials.
“A key to our future success will be the development of our commercial capabilities: going from showing to actively selling cars. Adopting a more active sales model is already supporting our ambitions, as the first markets to implement it are showing solid order intake,” Lohscheller said.
Polestar said it expects revenue for the full year to remain stagnant owing to the difficult market conditions and the import duties. In 2023, the company recorded revenue of $2.38bn (R41.50bn).
Polestar reaffirmed its target of achieving break-even cash flow by the end of next year, though at a lower volume than previously targeted.
The company handed over 11,900 vehicles in the third quarter compared with 13,900 vehicles a year ago.
The levy of US and European tariffs on Chinese imports has pressured Polestar to grow its production base in the US and away from China where it currently makes most of its vehicles.
To combat slowing demand, Polestar has been cutting costs by reducing headcount and negotiating with suppliers to reduce the price of manufacturing across its product lines.
The company said in August that it reached its target of achieving $1.3bn (R22.67bn) in external funding.
Polestar's funding problems had become acute at the start of the year after its big financial backer Volvo Cars said it would stop funding the company.
On Friday it said due to the current market conditions and the anticipated performance, it was engaged in constructive dialogue with its club loan lenders, who remain supportive of its loan covenants.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.