Polestar 3
Courtesy: Polaris
polar starThe Swedish electric car maker will take longer to reach profitability, its chief executive said on Thursday, after reporting lower than expected vehicle sales in 2024, sending the company’s U.S.-listed shares lower in premarket trading About 9%.
The company is backed by China auspiciousThe company has been trying to expand its business amid weak demand for electric vehicles and increasing competition from traditional manufacturers.
Over the past year, Polestar has sought to overhaul its business, including a major management shakeup, naming industry veteran Michael Lohscheller as CEO and appointing several new executives, including design chief, board chairman, chief financial officer officer and chief operating officer.
Lohscheller launched a review of Polestar’s business shortly after taking over in October.
The company announced the results of the review on Thursday, saying it expected positive free cash flow after the investment in 2027, well later than its previous forecast of the end of 2025.
Polestar previously expected flat revenue in 2024, but now expects a mid-teens percent decline and forecasts negative gross margins. It is expected to announce fourth-quarter results on March 6.
The company said on Thursday it had secured more than $800 million in 12-month term loan financing from multiple banks last month, some of which will be used to repay old loans.
The new financing will reportedly bring the company’s current debt to about $4.4 billion.
Polestar is also working to secure an additional 12-month $400 million loan, which is expected to be provided to the company later this month.
way forward
Polestar’s ambitious market expansion has also been delayed. The company will start sales in France this year, instead of its previous plan to enter seven countries in 2025.
These expansion plans have been pushed back to 2026 and beyond.
The electric vehicle maker’s updated business plan projects compound growth of between 30% and 35% over the next three years, and it expects adjusted core profits to be positive this year.
Polestar has worked to avoid high tariffs on Chinese-made cars by moving some manufacturing out of China.
While the company currently produces cars in the United States and China, it is expected to produce the Polestar 4 in South Korea in the second half of 2025.
Following the launch of the Polestar 7, the company said it would move to a single vehicle platform to simplify its business and reduce capital investment and development time.
Polestar was spun out of Sweden’s Volvo Cars, which stopped raising capital last year. The electric car maker is now majority owned by Chinese auto group Geely.
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