On November 8, Swedish EV maker Polestar lowered its long-standing delivery goal for 2025 and revealed that, despite cost reductions, it will still need to raise capital to break even.
The company also dropped its current-year guidance for 2023 by revising its delivery forecast to “Approximately 60,000” vehicles, which is at the lower half of its prior projection range. In May, the EV maker had slashed its targets from 80,000 to between 60,000-70,000.
However, Polestar claims that the introduction of new EVs will increase demand. For example, the Polestar 4, the company’s first electric SUV coupe, will go into production next week.
In the third quarter, the EV maker delivered 13,976 vehicles, a 51% increase from last year. Still, it decreased from the 15,800 cars during the second quarter. Additionally, The year-over-year growth comes amid the Polestar 2 rollout, including the recently launched upgraded 2024 model.
The company’s higher deliveries pushed revenue up 25% to $367.7 million in Q3, which increased costs and led to gross profits slipping 63% to $36.3 million.
The EV maker is also making further cost-cutting measures. It received $450 million in new financing from its initial backers, Chinese automaker Geely Automobile Holding and Geely affiliate Volvo. Therefore, it now projects that reaching break-even cash flow in 2025 will require an extra $1.3 billion in outside capital.
Polestar intends to keep building the brand while emphasizing profitability and volume growth. With the help of four new models, including the Polestar 5 on the horizon, the company aims to produce between 155,000 and 165,000 vehicles. Additionally, it anticipates gross profit margins in the high teens by the middle of the decade, with a better selection of vehicles and other initiatives that will boost profitability.