Anindita Chatterjee
Polestar, the electric car maker, is facing a significant challenge as its sales decline, prompting new leadership to rethink its sales strategy. After a disappointing third quarter, CEO Michael Lohscheller is taking action to improve the company’s performance by shifting the focus from online-only sales to more traditional dealership sales.
Sales Decline and Strategic Shift
In a recent announcement, Polestar reported a 15% drop in third-quarter deliveries, bringing the total to 11,900 vehicles. This decline is part of a broader trend affecting several European automotive manufacturers during this period. The total deliveries for the first nine months of 2024 also reflect a 23% decrease compared to the previous year, with Polestar acknowledging the challenging market conditions.
CEO Michael Lohscheller, who recently took over management responsibilities, stated, “We are going from showing to actively selling cars.” This new directive aims to enhance Polestar’s visibility and accessibility to customers, making it easier for them to test drive and purchase vehicles. Previously, customers could only purchase cars through the company’s website, which may have limited potential buyers.
Future Outlook
Despite the troubling sales figures, Polestar remains focused on its long-term goals. The company reiterated its aim to achieve break-even cash flow by the end of next year, although it has adjusted its previous volume targets downwards. Lohscheller expressed optimism about the Polestar 3 and Polestar 4 models, which the company hopes will drive growth in the latter half of the year.
Key points regarding Polestar’s outlook include:
- Concerns about market competition, particularly in China.
- Engagement in “constructive dialog” with lenders regarding loan covenants.
- Assurance that lenders are providing continued support.
In August, Polestar secured up to $300 million in additional funding through a one-year revolving term loan facility, which has strengthened its financial standing.
Challenges Ahead
The move to more active sales strategies comes at a crucial time. Polestar must navigate the intense competition in the electric vehicle (EV) market, particularly with growing demand for EVs worldwide. Compounding these challenges, the company has faced delays in launching new models, which has contributed to its financial struggles.
Shares of Polestar fell as much as 12.5% following the announcement of its delivery numbers. The company has seen its stock drop by more than one-third this year alone, further highlighting investor concerns about its future.
Leadership Changes
Lohscheller replaced Thomas Ingenlath, who struggled to address operational issues and corporate losses. With experience as former CEO of Opel, Lohscheller brings a fresh perspective and a drive to turn the company around. He began his tenure earlier this month and is already implementing changes aimed at stabilizing Polestar’s market position and enhancing sales strategies.
Conclusion
As Polestar embarks on a new chapter under Lohscheller’s leadership, the company faces pressing challenges and a competitive landscape for electric vehicles. The shift towards dealership sales could potentially revitalize its market performance and consumer engagement. With key strategies in place, Polestar is poised to make strides in the coming months as it seeks to adapt and thrive in an ever-evolving automotive marketplace. The road ahead may be rocky, but with renewed focus and commitment, there is potential for recovery and growth in the future
