EV maker Polestar posts 40% slump in Q1 deliveries

People look at a Polestar 2 electric sedan displayed in a shopping mall in Shanghai, China May 5, 2020. Picture taken May 5, 2020. REUTERS/Yilei Sun/FILE PHOTO

By Greta Rosen Fondahn

STOCKHOLM (Reuters) – Polestar saw a 40% drop in first-quarter deliveries, the Swedish electric vehicle (EV) said on Thursday, as the sector struggles with slowing demand.

While automakers and suppliers are betting on future demand for EVs, sales growth has slowed, with investment in capacity and technology development outrunning demand, boosting pressure on companies to cut costs.

Polestar said it delivered 7,200 vehicles in the first quarter, down 40% from 12,076 a year earlier.

A ramp-up in deliveries of its Polestar 3 and Polestar 4 two luxury SUVs will contribute to revenue in the latter part of the year, CEO Thomas Ingenlath said in a statement.

“These two cars will provide the basis for a strong revenue and margin progression during the second half of the year, supporting our 2025 targets,” Ingenlath said.

The company aims to deliver 155,000-165,000 cars in 2025.

Polestar said it had delivered 1,200 of the Polestar 4 SUV coupe in China in the first quarter, which was the first country to receive the car at the end of 2023.

Global deliveries of the Polestar 3 are set to begin in the second quarter of 2024 while the Polestar 4 is expected to reach first customers in Europe and Australia in August, with deliveries in America expected later in the year.

Investors’ enthusiasm for EV makers has cooled as growth in sales has slowed and financial losses have piled up, making life especially hard for start-ups like Polestar.

Financial backer Volvo Cars said in February it would cease further funding of Polestar, which has struggled to meet targets, and hand over most of its stake to its shareholders such as Geely.

The company is set to report its postponed fourth-quarter results on April 30 and first-quarter results on May 23.

(Reporting by Greta Rosen Fondahn and Marie Mannes in Stockholm; editing by Jason Neely)