Is Polestar the next Rivian or the next Fisker? The company’s looking to be the former not the latter, but if it’s going to be a success, it has a long way to go. The EV maker secured a $450 million loan for short-term help and delayed its fourth-quarter earnings report.
Michael Lohscheller, Polestar CEO, said the company’s growing, just won’t make its goal of being profitable for 2024.
Slow sales and dwindling cash reserves have it in a precarious place right now. The delay of the earnings report was the second, as it previously pushed back the Q4 report to March.
The slow sales are not only crimping the company’s ability to continue product development efforts, but also just from operating on a daily basis. In January, the company revealed the results of a strategic review designed to show the way to profitability.
However, the company secured $800 million in loans last December, plus it’s now added the $450 million loan. Polestar’s also renewed nearly $500 million in additional credit to help keep the wheels turning.
Show me the money
Polestar isn’t wasting time now that it has cash. It’s looking to conquest buyers, and it’s targeted the king of the hill: Tesla. The company is hoping to take advantage of a set of Tesla owners who aren’t happy with CEO Elon Musk.
The 2024 Polestar 2 is bringing several key updates to EV buyers
They’re offering big incentives to Tesla owners who will make the leap to Polestar 3. First, they offered a $5,000 discount to Tesla owners who lease a new Polestar 3. There are as much as $15,000 in additional incentives being floated to those making switch that they could end up with a $20,000 discount.
For Tesla owners who count themselves ashamed or at least uncomfortable with Musk’s moves in the last 12 months, i.e. buying Twitter and his affiliation with the Trump administration, this incentive is like an escape hatch, InsideEVs.com noted.
“This week saw some of the highest order days for Polestar 3, and the response to our Tesla Conquest Offer has been incredible,” Jordan Hofmann, Polestar’s U.S. head of sales wrote in a LinkedIn post last Friday.
“Manufactured in the USA, Polestar 3 is turning heads and drivers are making moves — it’s clear they like what we bring to the table. The excitement is real, the momentum is growing, and as I always say – we’re just getting started! We’ve got plenty more in store, and trust me, you’re going to want to watch what happens next,” he added.
More Polestar News
- EV Maker Polestar’s Profitability Going to Take a Little Longer
- Polestar Reports Massive 2023 Losses as the Company Faces Questions About its Future
- EV Maker Polestar Begins U.S. Production as it Seeks To Avoid Toughened U.S. Tariffs
What is next?
The 2025 Polestar 3 offers power and performance similar to the BMW iX or the Mercedes-Benz EQE.
According to the study, the goal is to record sales growth of 30% to 35% in 2025 as well as report a positive adjusted EBITDA. Gaining commercial and operational momentum, further margin, fixed costs and working capital improvements are expected from 2026 onwards, with a positive free cash flow after investments expected in 2027.
“With Scandinavian design, performance and a premium brand, Polestar has successfully positioned itself in the global automotive market. We have three outstanding cars on the road and a growing, passionate customer base,” said Michael Lohscheller, Polestar CEO, in a statement.
“We are building on the strong Polestar brand with design and performance at its core. But significant changes are needed to make this well-respected progressive brand a successful and viable business.
“We are speeding up our retail expansion and commercial transformation, whilst adjusting our future model line-up and significantly reducing our cost base. Both in terms of volumes and financials, we expect 2025 to be the strongest year in Polestar’s history.”
Polestar/Volvo is dead, they just don’t know it. Many more will follow (think letter “F”).