Swedish EV market Polestar misses projected delivery targets

Challenges in high-end models: Polestar Automotive Holding (A4N1y.F) disclosed its 2023 delivery figures, which failed to meet its projected targets, on January 11. The Swedish electric vehicle manufacturer encountered challenges as its higher-end models grappled with subdued demand amidst an unstable economic backdrop.

A rise in interest rates, implemented to counter persistent inflation, adversely impacted the appeal of Polestar's premium vehicles. This economic environment steered consumers towards more economical alternatives.

CEO Thomas Ingenlath had previously indicated in November that Polestar's strategy prioritised profitability over sheer volume. He emphasised the brand's commitment to premium sales rather than pursuing mass-market appeal, asserting a reluctance to engage in price reductions.

For the year 2023, Polestar recorded deliveries of 54,600 vehicles, falling short of its projected 60,000 units. In the fourth quarter, deliveries declined by nearly 8 per cent compared to the preceding quarter, amounting to 12,800 vehicles. Notably, this figure incorporates 880 units of the Polestar 4 compact luxury crossover distributed in China.

Andres Sheppard, a senior analyst at Cantor Fitzgerald, commented on the situation, noting the anticipated impact on delivery numbers due to increased focus on the Polestar 4 in China at the expense of the Polestar 2, which historically constituted the primary delivery vehicle for the company.

Polestar shares dip

In the financial markets, Polestar's shares listed in the United States experienced a significant decline, plummeting by more than half over the course of the previous year.

Revising its forecasts, the company adjusted its 2023 delivery expectations downwards for the second time in November, settling on an approximate figure of 60,000 vehicles. This revision followed a previously adjusted range of between 60,000 and 70,000 vehicles, marking a departure from its initial goal of 80,000 units.

In contrast, Tesla (TSLA.O) recently announced a record-breaking fourth-quarter delivery performance, surpassing market projections while achieving its 2023 targets. However, the company fell short of CEO Elon Musk's ambitious internal goal of 2 million annual deliveries. Consequently, Tesla relinquished its position as the leading EV manufacturer to China's BYD (002594.SZ), (1211.HK) in the most recent quarter, with Musk attributing reduced demand to elevated interest rates.

In a related development, Polestar announced the appointment of Per Ansgar as its interim Chief Financial Officer on Thursday.

(With Reuters inputs)