By Marie Mannes
STOCKHOLM (Reuters) - Swedish electric vehicle (EV) maker Polestar lowered its 2023 production guidance on Thursday and said it would cut headcount by 10%, citing a delayed production start for its Polestar 3 and a challenging environment for the industry.
The auto maker said it now expected to produce between 60,000 and 70,000 cars this year, versus the previously predicted 80,000.
It has been a tough quarter for EV startups, who face mounting competition from new Chinese players as well as from more established brands. An ongoing price war started by Tesla (NASDAQ:TSLA), in addition to high interest rates, has put a further squeeze on the already cash-strapped startups.
Polestar peers such as Lucid and Fisker, have both cut their production forecasts, with Lucid in March also trimming 18% of its workforce.
Polestar said the production start of its Polestar 3 would be delayed until the first quarter of 2024 instead of the initial mid-2023 start. The company said the delay was due to Volvo Cars - which produces its cars and is delaying its own EX90 - having to do further software development and testing.
Cash and cash equivalents at the end of the first quarter were $884.3 million, compared with $973.9 million in the preceding three-month period. An operating loss of $199.4 million was narrower than a loss of $257.9 million a year ago.
Worries of cash running out have been a prevailing issue with EV startups, where many players have seen their initial market valuations evaporate, with few options for funding in a turbulent economy.
Polestar has said previously it has sufficient funds to see it through 2023, after it received $1.6 billion in financing in November from its two biggest shareholders Volvo Cars and Li Shufu-controlled PSD Investment,
However, it will still need further funding to get through the next few years.
Shares in U.S listed Polestar were down over 6% in pre-market trading.