Swedish automaker Polestar has slashed its 2023 volume forecast by as much as a quarter and announced a delay — its second — in launching its high-volume electric crossover.
Polestar 3 production is pushed to the first quarter of 2024 because of software development issues plaguing affiliate Volvo’s new electric platform, which underpins the midsize crossover. Polestar 3 production was to begin in August, according to AutoForecast Solutions.
Platform development snafus have also delayed Volvo’s EX90 flagship.
Production of the electric crossover was scheduled to begin at Volvo’s North Charleston, S.C., factory in December 2023. Volvo said that output is now expected to begin in the first half of next year.
U.S. deliveries of the three-row electric crossover are pushed to the third quarter of 2024, a source briefed on the matter told Automotive News.
Polestar now expects 2023 global sales volumes of 60,000 to 70,000, compared with its earlier forecast of about 80,000 units. Polestar delivered 51,491 units last year.
“Given the tougher economic climate, it is difficult for us to compensate for the absence of the Polestar 3 volumes with incremental Polestar 2 volume,” Polestar CFO Johan Malmqvist said on an earnings call Thursday. “That, coupled with high market uncertainties, led us to call down the volumes.”
Polestar CEO Thomas Ingenlath said the volume forecast adjustment would also help the automaker protect the profit margin on the Polestar 2.
“We are intent not to push cars into the market for any price just to achieve a volume that we once announced,” Ingenlath said on the call. Lowering sales estimates “gives us the opportunity to maintain the right balance between the volume that we achieve and what we achieve in terms of margins and price stability with our products.”
The automaker also said it is taking the knife to costs. Polestar said it would cut global headcount 10 percent, or about 300 jobs, and institute a global hiring freeze.
The automaker will also keep from adding the 500 jobs it intended for this year.
“We are also working on additional initiatives to drive out cost and to conserve cash in the company, such as trimming the development costs of certain car programs, efficiency gains with our commercial operation,” CFO Malmqvist said. “For example, we’ve seen improvements in the quality levels of the Polestar 2 leading to lower warranty repairs.”
The latest delay in launching the Polestar 3 — and an essential U.S. market product — puts further pressure on Polestar’s retailers struggling with limited inventory from a single sedan model.
Polestar dealer Matthew Haiken now expects to see customer deliveries of Polestar 3 begin in Q2 next year.
The pushback puts “a lot of stress” on the retail network, the CEO of Polestar Short Hills in New Jersey told Automotive News.
“The EV market is uber-competitive; everybody is super-aggressive,” he said. “We need throughput; we need product. It’s an SUV world and the Polestar 2 is not an SUV.”
