Polestar, the electric vehicle-focused brand, has recently announced plans to reduce its global workforce by cutting hundreds of jobs. The move aims to streamline operations and reduce expenditures as the company seeks to boost sales of its upcoming models, Polestar 3 and Polestar 4, without seeking additional funding from its parent companies, Geely and Volvo Cars.
Despite being backed by Volvo Cars and Geely, Polestar is still considered a startup, having introduced the limited-run PHEV Polestar 1 and the popular Polestar 2 PHEV over the past seven years. While the Polestar 2 has generated excitement, the brand's future prospects primarily hinge on its upcoming models. The Polestar 3, the brand's first SUV and the first model to be produced in the U.S., is particularly crucial. Following this, Polestar plans to introduce the Polestar 4 crossover, Polestar 5 sports sedan, and a Polestar 6 based on an original roadster concept.
The challenges faced by Polestar in 2023, including falling short of delivery targets, were attributed to delays in launching the Polestar 3 due to software issues. To strengthen its position and move beyond these challenges, Polestar has opted for a leaner approach, including workforce reductions.
Polestar to cut 450 jobs around the globe
According to Reuters, Polestar's job layoffs would affect around 450 people, with the company claiming "challenging market conditions" as the rationale for laying off nearly 15% of its global staff.
Low demand for Polestar vehicles, and EVs in general, has been a thorn in the side of many OEMs heading into 2024. With inflation, supply chain issues, and a pricing war started by Tesla, it's a difficult moment to push electrification, especially when a newer company like Polestar is attempting to establish its position in the global market with a single model moving around on roads.
Polestar prefaced today's job cutbacks by telling the public that it would need to cut costs and optimize in order to break even on cash flow by 2025. Polestar's spokeswoman shared the remark and confirmed the layoffs in a statement released on Friday:
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.
Looking beyond today's job layoffs, Polestar 3 production is slated to commence later this year in China and South Carolina, followed by contract manufacture of the Polestar 4 in South Korea. Could this be another sign that Polestar is going private again?
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