AutoBeta(AutoBeta.net)05/12 Report--

On may 11th, according to several media reports, Swedish electric carmaker Polaris will cut 10% of its jobs worldwide and has frozen recruitment.

Polar Star informed employees of the upcoming layoffs at a recent financial meeting, but did not say when the layoffs would be made or which departments would be affected. JohanMalmqvist, the company's chief financial officer, said the company was working to reduce operating expenses and take targeted measures against its employees. "based on the current macroeconomic environment, the company is looking to control costs," JohanMalmqvist explained.

Polestar is a high-end electric car brand jointly launched by Geely and Volvo, and its models are mainly comparable to Tesla. In 2015, Volvo wholly acquired Polar Star and became Volvo's electrified high-performance R & D department. In October 2017, Volvo and Geely jointly announced the formation of a joint venture brand, Polestar, which has since become an independent electric high-performance vehicle brand and joined Geely's new energy product series with a new new energy vehicle brand. In June 2022, Polar Star sounded the opening bell on the NASDAQ Stock Exchange in the United States and was officially listed.

Polar Star released four models in 2017, of which the first one is a two-door sports car with a price of 1.45 million. The car was released in October 2017, but it took two years to officially launch. After listing, the performance is also very mediocre, with only 24 cars sold in 2020, but the industry believes that the purpose of Polar 1 is not to sell, but to create a high-end brand image. On February 27th, Polar released its second product, Polar 2, which is the first pure electric car of Polar Star, based on Volvo CMA architecture, with a price range of 25.78 to 338000 yuan, mainly comparable to Tesla Model3, but it also took nearly a year and a half to officially deliver.

In June 2022, Polaris unveiled a future product chart, including Polar 2, Polar 3, Polar 4 and Polar 5. According to the plan, three new cars will be launched in the next two years. Among them, Polestar 3 was originally planned to be launched in October 2022, positioning performance SUV;Polestar 4 will be launched in 2023, positioning performance coupe SUV;Polestar 5 will be launched in 2025, positioning four-door GT sports car. However, the polar star failed to achieve the delivery rhythm as scheduled.

On the day of the earnings release, Star Motors announced that it had postponed production of its strategic model Polar 3 to the first quarter of 2024 because it would take more time to develop the final software of Volvo's new all-electric platform shared by Volvo cars. Volvo EX90 was also affected for the first time. However, the production plan of the Star 4 remains unchanged, with production in China in the fourth quarter of 2023 and in other markets in early 2024, the company said. At present, the Star 4 has been officially launched at the Shanghai International Auto Show held in April, with a new car guidance price of 349800-533800 yuan and a single-motor and dual-motor version. The CLTC has a pure electric mileage of 612-709km.

According to the plan, Polar originally set an annual global sales target of 80,000 vehicles in 2023, but taking into account the delay in mass production of new cars and other reasons, Polar has announced that it will reduce global sales this year to between 60,000 and 70,000 vehicles, a reduction of as much as 25%. Data show that in 2022, the global delivery volume of Polaris reached a record high of 51491 vehicles, while the global delivery volume of Polaris in the first quarter of this year increased by 26% year-on-year to 12076 vehicles, which means that Polar only achieved 20.12% of its sales target of 60, 000 vehicles in the first quarter. Polar needs to complete at least 48000 of the delivery volume to meet the target.

In addition to the lag in production and the pressure on sales, like most car companies, Ji Xing also faces funding problems. Financial data show that polar star's total revenue in the first three months of 2023 was $550 million, up 21% from a year earlier, but below market expectations of $570 million; a single-quarter operating loss of $199 million, down 23% from a year earlier; and a net loss of $9 million, compared with a net loss of about $274.5 million in the same period last year. At the end of March, Polar had cash and cash equivalents of $884.3 million, down $89.6 million from the previous quarter. By the close of trading on may 11th, the shares of Ji Xing had plunged 12.47% in a single day, with a total market capitalization of 7.419 billion.

New car traffic insurance data show that the domestic sales of Polar Star was 1717 in 2022, compared with rival Tesla's cumulative sales of 441697 in 2022. Polaris had previously said it had enough money to last until 2023, but the suspension of global hiring and layoffs of 10 per cent could mean tight cash flows.

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