STOCKHOLM — Swedish electric vehicle (EV) creator North Star It lowered its 2023 production guidance on Thursday and said it would cut headcount by 10%, citing a delayed start of production for its Polestar 3 and a challenging environment for the industry.
The automaker said it now plans to produce between 60,000 and 70,000 cars this year, up from 80,000 previously expected.
It’s been a challenging quarter for EV startups, which face growing competition from new Chinese players as well as more established brands. An ongoing price war has begun Teslain addition to high interest rates, it has put a strain on already cash-strapped startups.
Polestar peers like Polished AND fiskerthey both cut their production forecasts, with Polished in March also the cut of 18% of its workforce.
Polestar said the start of production of its Polestar 3 will be delayed until the first quarter of 2024 instead of the initial mid-2023 start. The company said the delay was due to Volvo Cars – which makes its own cars and is delaying its own EX90 – needs to do more software development and testing.
Cash and cash equivalents at the end of the first quarter were $884.3 million, compared to $973.9 million in the prior quarter. An operating loss of $199.4 million was less than a loss of $257.9 million a year ago.
Concerns about running out of cash have been a prevalent problem with EV startups, where many players have seen their initial market valuations evaporate, with few funding options in a turbulent economy.
Polestar previously said it had enough funds to run through 2023, after receiving $1.6 billion in funding in November from its two largest shareholders Volvo Cars and Li Shufu-controlled PSD Investment.
However, it will still need additional funding to make it through the next few years.
Shares of US-listed Polestar fell more than 10%.
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