Polestar has announced a significant reduction in its global workforce, cutting around 450 jobs, accounting for approximately 15% of its total staff. This decision comes amid challenging market conditions that have forced the company to reevaluate its business strategy and operational scale.
The EV industry has been facing a myriad of challenges, including slow growth in demand, aggressive price wars, and supply chain issues. Polestar, in particular, has been struggling to find its footing in an increasingly competitive market. The company’s decision to trim its workforce is part of a broader plan to achieve cash flow break-even by 2025 and reduce reliance on external funding from its key owners, Volvo Cars and Geely.
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.Polestar spokesperson (via Automotive News)
In November, Polestar revised its delivery forecasts and business plans, acknowledging the need to cut costs and boost margins. The company, which listed in 2022, has seen its stock value plummet by over 82% in the past year.
Despite these challenges, Polestar CEO Thomas Ingenlath remains optimistic about the company’s future. In a recent interview, he emphasized Polestar’s strong market position and ongoing efforts to establish a solid presence in the EV sector. However, with rivals like Tesla initiating price cuts and Chinese manufacturers offering more affordable EV models, Polestar faces an uphill battle in maintaining its market share.
Despite the setbacks, Polestar continues to move forward, with its 2024 Polestar 2 lineup featuring new upgrades like longer mileage and faster charging. Production of its newest model, the Polestar 4, also recently kicked off in China. Yet, the company acknowledges the challenges ahead, particularly in convincing buyers to choose their vehicles over cheaper options from competitors.