Swedish electric vehicle (EV) maker Polestar lowered its 2023 production guidance on Thursday and said it would cut headcount by 10%, citing a delayed production start for its Polestar 3 and a challenging environment for the industry.
The auto maker said it now expected to produce between 60,000 and 70,000 cars this year, versus the previously predicted 80,000.
It has been a tough quarter for EV startups, who face mounting competition from new Chinese players as well as from more established brands. An ongoing price war started by Tesla (TSLA.O), in addition to high interest rates, has put a further squeeze on the already cash-strapped startups.
Polestar peers such as Lucid (LCID.O) and Fisker (FSR.N), have both cut their production forecasts, with Lucid in March also trimming 18% of its workforce.
Polestar said the production start of its Polestar 3 would 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 produces its cars and is delaying its own EX90 - having to do further software development and testing.
Cash and cash equivalents at the end of the first quarter were $884.3 million, compared with $973.9 million in the preceding three-month period. An operating loss of $199.4 million was narrower than a loss of $257.9 million a year ago.
Worries of cash running out have been a prevailing issue with EV startups, where many players have seen their initial market valuations evaporate, with few options for funding in a turbulent economy.
Polestar has said previously it has sufficient funds to see it through 2023, after it received $1.6 billion in financing in November from its two biggest shareholders Volvo Cars and Li Shufu-controlled PSD Investment,
However, it will still need further funding to get through the next few years.
Shares in U.S listed Polestar were down over 6% in pre-market trading.
