24/7 Insights
- The Polestar Automotive Holding (NASDAQ: PSNY) chairperson has stepped down.
- It is a bad sign for the struggling EV maker, with shares near an all-time low.
Just hours after electric vehicle (EV) company Fisker went under, declaring bankruptcy and wiping out shareholders, another EV maker is in deep trouble. Hakan Samuelsson, once CEO of Volvo, departed as board chair at Polestar Automotive Holding (NASDAQ: PSNY). That left the company in turmoil.
Polestar became a blank check two years ago. It was owned mainly by Volvo, which distributed some shares to Chinese car giant Geely, now a primary owner. As Bloomberg points out, “Since the listing, the EV maker has repeatedly tapped its largest owners for funds.” That action cannot go on indefinitely as the company struggles to sell vehicles.
The current share price is $0.68, near its all-time low. The stock is down 83% in the past year, compared to a 24% increase in the S&P 500. Given the company’s prospects, the stock is unlikely to recover.
Polestar’s primary recovery plan is to enter seven new markets next year: France, Czech Republic, Slovakia, Hungary, Poland, Thailand, and Brazil. Even though sales fell by a third in the first quarter, it forecasts selling up to 165,000 vehicles next year. Reuters says sold just over 54,000 vehicles in 2023. Those figures look very like the forecast unit increases of troubled Lucid and Rivian.
Polestar sells two vehicles in the United States: the Polestar 2 and Polestar 3. The latter has a base price just below $75,000. High prices are one reason given for avoiding EVs. The others, which Polestar cannot dodge, are range and the number of charging stations.
Polestar cannot avoid the fate of other small EV companies.
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