Polestar in turbulence: Volvo's electric vehicle brand to cut 15% workforce as sales decline

Polestar, a brand of electric cars, branched out from Volvo a few years ago. If we examine Polestar's lineage closely, Geely emerges as a Chinese company that has owned Volvo for a significant period. Polestar was purposed to meet the burgeoning interest in premium electric cars in Europe. But all has not gone as planned.

As Automotive News Europe reports, Polestar must downsize its workforce by approximately 15%, indicating that nearly 450 individuals around the globe will be impacted. The underlying reason is the dwindling interest in electric cars. In 2023, Polestar sold 54.6 thousand cars, falling short of its target of selling 60 thousand vehicles.

The shortfall does indeed translate into financial terms. Polestar is soliciting funding from its owners for further development. In 2023, the company secured a loan of $1.6 billion to address operating expenses. However, the aim is to reduce dependence on external funding sources gradually.

Polestar's CEO, Thomas Ingenlath, relayed his optimism about 2024 sales to reporters. European orders for Polestar 4 and the anticipated popularity of Polestar 3 lend encouragement for a successful year ahead. The Swedish brand isn't alone in facing a demand for electric cars that hasn't met expectations. Only time will tell whether Polestar will steer through this turbulence.