Swedish electric car manufacturer Polestar has revealed plans to trim approximately 15% of its global workforce, totaling around 450 jobs, citing “challenging market conditions.” This move comes in response to the sluggish growth of the electric vehicle (EV) market over the past year, marked by subdued demand, significant price reductions, reduced subsidies, and supply chain challenges.
In an effort to navigate these challenges, Polestar adjusted its delivery forecasts in November, unveiling a revised business plan with the goal of achieving cash flow break-even by 2025. The company aims to decrease its reliance on external funding from major stakeholders 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,” stated a Polestar spokesperson on Friday.
In addition to the job cuts, Polestar emphasized its commitment to cost-cutting measures to enhance profit margins, aligning with the company’s broader strategy to overcome the hurdles faced by pure EV automakers. Polestar had previously acknowledged challenges in meeting its revised 2023 delivery targets, attributing the setback to factors such as high inflation, low demand, and a competitive price war catalyzed by Tesla.
The company’s decision to streamline operations and optimize costs reflects the broader landscape in the electric vehicle sector, where manufacturers are grappling with various obstacles on the path to profitability.
