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Following the well-documented collapse of California-based electric vehicle startup Fisker that culminated in its Chapter 11 bankruptcy filing this week, another ambitious EV startup is facing a similar fate.
Although Fisker’s downfall has been marked by quality control issues reported by owners, buggy software, and scathing reviews by Consumer Reports and a big-name tech YouTuber, it seems like this company was dominating electric cars in the bag until It achieved highs and lows. Turbulent electric vehicle market.
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Since going public on the Nasdaq in 2022 via a reverse merger with a special purpose acquisition company (SPAC), shares of Swedish electric vehicle startup Polestar have soared. (PSNY) It has lost more than 90% of its value, trading at just $0.68 per share at the time of this writing.
At one point, the brand was worth more than $21 billion, but now its market cap is only $1.435 billion.
Pole Star
Volvo poses a problem for Polestar
Polestar’s problems began in February 2024, when parent Volvo announced it would reduce its stake in the electric car startup from 48% to just 19% in the fourth quarter of 2024, transferring its stake to its owner, Chinese auto giant Geely. (jelly) .
Like many EV brands, Polestar has felt the effects of an overall slowdown in EV sales. In 2023, the brand sold 54,600 vehicles to customers, short of the sales target of 60,000 vehicles.
RELATED: Volvo calls off luxury rival Tesla
Citing “challenging market conditions,” the brand reduced its global operations by 450 jobs, or 15% of its workforce, in January 2024. Additionally, the brand’s deliveries during the first quarter of 2024 were down 53% compared to the first quarter of 2024. 2023.
in Report May 30 by Automotive NewsThe subpar sales performance is due to buyers facing higher interest rates and a sales shift away from fleet sales such as those undertaken by car rental companies, said Gregor Hembrow, president of Polestar North America.
“In 2024, fleet and leasing will no longer be a major part of our business equation,” Hembrow told AutoNews. “The majority of throughput will go through the dealer channel.”
In the same report, ISeeCars executive analyst Karl Brauer noted that Polestar is one name in an unbalanced EV market, alongside big-name competitors like Tesla, Lucid, BMW and even Hyundai.
“There are a very large number of electric vehicle models and a very large production capacity for this market,” Brauer said.
More EV business:
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The Nasdaq deals a big blow to Polestar
in Statement issued on May 17Polestar acknowledged that as a result of failing to file its fiscal year 2023 annual report and first quarter 2024 financial reports, it received a notice of deficiency from Nasdaq. This notice indicates that the company is at risk of non-compliance with exchange rules and is competing to be delisted.
As a result, the stock price fell dramatically, reaching less than a dollar per share on May 21.
RELATED: Forget Tesla Supercharging, Polestar’s New Charging Tech Can Charge Faster
in Statement issued on May 31The automaker announced that it expects to report its 2023 annual report and first-quarter 2024 results by the end of June 2024.
How to dig out of a hole, according to Polestar
Polestar was previously founded as its own entity in 2017, and was a sub-brand with deep ties to Volvo.
Polestar initially started out as a racing team, fielding track-ready Volvo cars as part of the Swedish Touring Car Championship (STCC). The team would eventually become the brand’s official tuning partner, and the duo established a relationship similar to Mercedes-Benz and tuning company AMG, eventually selling modified, performance-oriented Volvo cars at their dealers.
In 2015, Volvo bought Polestar and revamped it into a brand that sells only electric cars, with the stylish Polestar 1 coupe introduced in 2017.
Polestar is now seeking to increase its sales, and expects to sell between 155,000 and 165,000 vehicles next year. To achieve this goal, it is looking to expand its operations to destinations hungry for electric vehicles.
In a statement published this week, the electric vehicle brand announced that in 2025 it will begin selling cars in seven major EV markets, including France, Czechia, Hungary, Slovakia, Poland, Brazil and Thailand. The brand is particularly excited about the move into France, as it is the largest market by volume for electric vehicles in the EU after Germany, but overall, its new move is aimed at attracting new customers.
“Expanding our retail operations with new and existing partners will enable us to reach even more customers,” said Thomas Ingenlath, CEO of Polestar. “Through these partnerships and expansion, we will leverage our strong brand and growing model portfolio.”
Currently, Polestar is offering a barrage of incentives to move Polestar 2 vehicles off dealer lots, including lease offers of up to $299 per month for 27 months in the U.S., which includes a $10,000 Polestar Clean Vehicle incentive and a $2,000 rebate for Costco members. Looking to buy or lease a Polestar 2.
Polestar is also looking to expand its model lineup beyond its current offering of the Polestar 2. The brand recently released the Polestar 3 SUV and the brand unveiled the Polestar 4 At the New York International Auto ShowDeliveries are expected to begin later this year.
Additionally, Polestar is looking to innovate beyond just radical car design. In a test car equipped with experimental solid-state silicon anode batteries made by StoreDot, engineers were able to Charge from 10% to 80% in just 10 minutes – Much faster than a Tesla Supercharger.
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