Volvo’s Polestar spinoff had a tough 2024 and 2025 looks like it could be just as tough.
The EV manufacturer was announced On Thursday that it expects to generate less revenue in fiscal year 2024 than in 2023, after previously estimating that sales would remain the same. This was due to “less than expected sales of the Polestar 3 and Polestar 4”, driven in part by a global EV price war.
Increased sales have put Polestar under pressure from its creditors. A year ago, the automaker received a $950 million loan from a syndicate of banks. Polestar it was they are supposed to produce more than $5.3 billion in proceeds in 2024 as part of this loan agreement.
The company won’t report its final 2024 financials for a few more months, but revenue will be well below 2023’s $2.4 billion, according to Thursday’s guidance. (Polestar said investors should expect a “mid-teens rate of decline.”) In turn, Polestar said it worked with its parent company, Chinese conglomerate Geely Holdings, and the banks behind the loan, to modify this revenue target.
Polestar also announced Thursday that it must restate all of its financial statements dating back more than two years because of accounting errors related to the tools it uses to build cars. The company said it indicates assets and liabilities related to this tool along with “other minor bugs that have been identified will also be fixed as part of this refactoring process.”
All this comes after Polestar went through layoffs and appointed a new CEO, CFO and COO in 2024. Last year also saw the company lose Volvo’s financial support.
Polestar still maintains its hopes that the new models will help boost sales. The Polestar 5 — a sedan based on the sharp Precept concept that debuted in 2021 — will go on sale later this year. Polestar plans to expand sales in France this year.
Polestar also shared Thursday that the upcoming Polestar 7 will be a “premium compact SUV,” giving it an entry into a popular and profitable vehicle segment. But the company has to survive long enough to get to that model — for which it didn’t give a release date.
