Swedish electric automaker, Polestar Automotive (NASDAQ:PSNY) on Thursday lowered its 2023 production guidance and announced that the company would cut headcount by 10%, citing a delayed production start for its Polestar 3 and a challenging environment for the industry.
The electric vehicle company now expects to produce between 60,000 and 70,000 cars this year, versus the previously predicted 80,000.
EV startups have faced a tough first quarter as competition mounts from Chinese rivals, as-well-as from more established brands. In addition, the ongoing price war initiated by Tesla (NASDAQ:TSLA), and high interest rates, has put a further squeeze on the already cash-strapped startups.
Others, such as Lucid (NASDAQ:LCID) and Fisker (NYSE:FSR), have cut production forecasts. In March, Lucid went as far as cutting 18% of its workforce.
Polestar pushed back the start of production of its Polestar 3 until the first quarter of 2024 instead of the initial mid-2023 start. The company said the delay was due to Volvo Cars (ST:VOLCARb) – which produces its cars – having to do further software development and testing.
Polestar has struggled with funds. However, in November the automaker received $1.6 billion in financing from its two biggest shareholders, Volvo Cars and Li Shufu-controlled PSD Investment. Though the company will still need further funding to get through the next few years.
Shares of PSNY are down 10.32% in early trading on Thursday.
