July 25, 2024
Electric & Hybrid Cars

Polestar Faces Increased Losses in 2023 Due to Declining Demand for EVs

Polestar, a Swedish electric vehicle manufacturer, announced on Friday that its revenue for 2023 decreased and its losses expanded due to a slowdown in demand for its higher-priced models.

Shares of the company, listed on the U.S. stock market, dropped 3.1% to 80 cents. The stock has declined over 63% this year by Thursday’s closing.

The lead-up to Polestar’s earnings report was filled with challenges, including decreased funding from major supporter Volvo Cars and sluggish interest in electric vehicles.

Polestar will release its first-quarter financial results and second-quarter volumes on July 2 before the market opens.

The demand for electric vehicles has been impacted by concerns about range, higher interest rates, and the availability of competitively priced hybrid cars.

The company had postponed several quarterly financial reports due to accounting errors in 2021 and 2022, and has made corrections in its 2023 annual report.

In the fiscal year 2023, Polestar reported revenue of $2.38 billion, a 3% decrease from $2.45 billion in 2022, attributing this to increased discounts and lower carbon credit sales.

Polestar recorded a gross loss of $414.7 million for the year, a significant decrease from the $98.4 million gross profit in the previous year.

Following an evaluation in 2023, the company had to devalue its assets associated with the Polestar 2 model by $329.7 million, resulting in a $240.5 million impairment charge.

Polestar incurred an additional charge of approximately $120 million due to weaker-than-anticipated demand in certain markets, leading to a decrease in the value of unsold vehicles.

The net loss for 2023 widened to $1.17 billion from $481.5 million in the previous year.

 

FAQ

Q: When will Polestar release its first-quarter results and second-quarter volumes?

A: Polestar will announce its first-quarter results and second-quarter volumes on July 2 before the market opens.

Conclusion

Despite facing challenges with declining revenue and increased losses, Polestar remains committed to navigating the changing landscape of the electric vehicle market.

Leave a Reply

Your email address will not be published. Required fields are marked *