Polestar Plans Cuts as EV Tariffs, Price Pressure Deepen Loss

A 2024 Polestar 3 electric vehicle.

(Bloomberg) -- Polestar Automotive Holding UK Plc is making more cost cuts after losses deepened in the first quarter as tariff barriers grow and price pressures increase for electric-vehicle makers.

The Swedish manufacturer posted a $232 million operating loss for the three months through March, 5% wider than the comparable period last year.

The Gothenburg-based company, once in the vanguard of the electric-car movement, has lost nearly 95% of its value since spinning out of Volvo Car AB two years ago. Polestar has struggled with cash burn amid slower-than-expected sales.

After two rounds of job cuts — reducing staff by 10% in 2023 and then by another 15% since then — Polestar said Tuesday that it’s adapting its business plan, which will include “additional mitigating actions.” A spokesperson said these steps will include reducing costs across the supply chain, rather than additional staffing cuts, with the aim of reaching break-even cash flow by the end of 2025.

The company delivered about 7,200 cars in the first quarter and more than 12,000 in the following three-month period. Chief Executive Officer Thomas Ingenlath said the company’s plan for seven new market launches in 2025 will be key growth drivers.

Polestar has said previously that its two new SUVs, the Polestar 3 and 4, will help boost sales to more than 155,000 vehicles next year.

Currently, Polestar builds a majority of its cars in China. It’s on track to start production of the Polestar 3 SUV in South Carolina this summer, the company said, following several key regions moving to increase tariffs on Chinese-made EVs amid growing geopolitical tensions.

The US now charges import levies of 100%, while the European Union is set to formalize provisional tariffs of as much as 48% this week. Polestar will also start production of the Polestar 4 Premium Sport SUV in South Korea in the second half of 2025.

--With assistance from Rafaela Lindeberg.

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