Categories: News

Faced with difficulties, Polestar is fundamentally reorganizing itself

Polestar experienced a downturn in its performance in 2023 after a strong start. As a result, Volvo’s electric subsidiary needs to restructure its teams and investments…

It is a brand well known in Europe, but not yet visible on French roads: Polestar.

A rapid rise in the European landscape

Independent of Volvo since 2018, Polestar distinguished itself by launching a new model in 2019, the Polestar 1. This plug-in hybrid coupe, with over 600 horsepower, was limited to 1,500 units, making this new premium division highly desirable. However, Polestar quickly shifted towards its main focus: 100% electric. The Polestar 2, a four-door sedan, was introduced in 2020 as a competitor to the Tesla Model 3, offering 231 horsepower and a theoretical range of 481 kilometers on a single charge (WLTP). Following its success in Europe, especially in Scandinavia, Polestar expanded its range by launching the Polestar 3, an electric SUV, in the past year. The Polestar 3 shares its foundation and many components with the Volvo EX90. The brand also has two upcoming models planned: the Polestar 4, a coupe SUV, and the Polestar 5, a large electric sedan with a sleek design.

Difficulties due to falling European demand

Despite the ambitious projects, Polestar faced challenges in recent months. The brand had hoped to sell 60,000 cars in 2023 but only managed to sell 54,600, resulting in a workforce reduction of 15%, with around 450 layoffs. Additionally, despite Volvo’s significant investment in Polestar (with a 48% stake), the brand struggled to sustain its cash flow. As a result, Volvo is planning to sell its Polestar shares to Geely, its parent company. This move aims to create separate legal entities for both Volvo and Polestar, enabling a better balance of power and direct control by Geely. This operation will not affect Geely’s stake in Volvo, which remains at 79%. Polestar isn’t the only brand facing challenges in Europe with electric models, as the demand for this type of car has been decreasing in recent months.

Read also:

Polestar: Volvo’s iconic AMG models

The Polestar 2 challenges the Tesla Model 3

Volvo EX90: the large 100% electric SUV is revealed

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