Polestar announces plans to cut 15% of its global workforce – EV maker missed its 2023 sales target

Electric carmaker Polestar doesn’t look to be in the best of shape. Earlier this month, the company said it missed its 2023 sales targets as a result of high inflation, low demand and a price war sparked by Tesla and Chinese EV maker BYD.

Now, the brand, which Volvo and Geely made into a stand-alone entity in 2017, has announced plans to cut around 450 jobs globally, Reuters reports. The reduction of about 15% of its total workforce comes amid “challenging market conditions”, it said last week.

The company delivered 54,600 cars globally in 2023, and while that was a 6% improvement from 2022, was well down from the 84% growth it enjoyed in 2021. More importantly, it was short of its target of 60,000 cars, which had been revised from the target of 80,000 vehicles set at the beginning of 2023.

Last November, the Swedish outfit outlined a revised business plan, aiming to plug a US$1.3 billion (RM6.15 billion) funding gap to break even in 2025 and to reduce its reliance on funding from Volvo. “As part of this business plan, we need to adjust the size of our business and operations. This involves reducing external spend and, regrettably, also our number of employees,” the news agency quoted a Polestar spokesperson as saying.

Over the past year, many automakers have warned that the anticipated growth in EVs has been slow to emerge due to poor demand, heavy price cuts, lower subsidies and supply chain issues.

For a brand like Polestar, increasing competition and an inability to match the price reductions made by Tesla and BYD means a rocky road ahead, and analysts have ventured that the best solution is for Polestar to eventually fold back into the Volvo Cars-Geely ecosystem to ensure its survivability.

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