Polestar reports growing red ink for 2023 as EV demand slows

Polestar said on Friday, after months of delays in turning in its financial reports, that its 2023 revenue fell about 3 percent and its losses widened as it grappled with slowing demand for its higher-priced models.

The tense anticipation leading to Polestar's earnings announcement was fraught with hurdles, including reduced investment from major backer Volvo Car and slower-than-expected demand for electric vehicles.

The Gothenburg, Sweden-based company, once in the vanguard of the electric-car movement, has lost nearly 95 percent of its value since spinning out of Volvo two years ago. Its shares rose as much as 14 cents to 83 cent in New York trading, valuing the company at $1.74 billion.

Polestar said it will report its first-quarter results and second-quarter volumes on July 2.

Demand for EVs has suffered as range anxiety, higher-for-longer interest rates, and attractive lower-priced hybrid vehicles have weighed on consumer demand.

The company had postponed multiple quarterly financial reports, citing accounting misstatements in 2021 and 2022, and has rectified metrics in its 2023 annual results statement.

Polestar reported revenue of $2.38 billion for fiscal year 2023, down from $2.45 billion from restated 2022 figures, citing higher discounts and lower sales of carbon credits.

The company reported a gross loss of $414.7 million for the year, compared with a gross profit of 98.4 million a year earlier.

Polestar said after an analysis conducted in 2023, it had to lower the value of its assets related to its Polestar 2 model by $329.7 million, resulting in an impairment charge of $240.5 million. The company said it incurred a further charge of about $120 million due to lower-than-expected demand in some markets, which led to a drop in the value of its unsold cars.

Net losses widened to $1.17 billion in 2023 from $481.5 million in the prior year.

Two new crossovers

Polestar didn’t disclose an outlook for the year. It previously said its two new crossovers, the Polestar 3 and 4, will help boost sales to more than 155,000 vehicles next year. Currently, Polestar builds a majority of its cars in China. 

It is starting production of the Polestar 3 midsize crossover in South Carolina this summer, after several key regions raised tariffs on Chinese-made EVs amid growing geopolitical tensions. 

The U.S. now charges import levies of 100 percent while the European Union next week is set to formalize provisional tariffs of as much as 48 percent. Polestar will also start production of the Polestar 4 Premium Sport SUV in South Korea in the second half of 2025.

Reuters and Bloomberg contributed to this report