Lockdowns in China slash Polestar sales

Polestar has announced record sales for the first four months of 2022, but also cut its 2022 sales plan due to slower sales in China.

In the first four months of the year, vehicle sales more than doubled to approximately 13,600 and the company’s order take more than tripled to nearly 23,000 compared to the same period in 2021.

During the period, Polestar increased its global presence to 23 markets, up from 19 at the end of 2021, putting the company on track to meet its target of 30 markets in aggregate by the end of 2023. New markets in the Middle East and Europe will be joined by Spain and Portugal imminently. Plans are underway to begin operations in Israel and Italy later in 2022.

In addition, Polestar has announced a global partnership with the car rental company Hertz to supply 65,000 cars over the next five years.

Polestar also said it is facing supply chain constraints that continue to challenge the whole of the auto industry. Further, as a result of prolonged government COVID-19 lockdowns in China during the first half of 2022, Polestar has now announced a reduction to the number of customer vehicle sales that it will be able to deliver in 2022 from 65,000 to approximately 50,000.

It says the reduction for 2022 is 100% attributable to the lockdowns in China. Polestar, along with its partners Volvo Cars and Geely, said it continues to actively manage these ongoing supply chain challenges, as it did in 2021 when the company delivered approximately 29,000 vehicles. Through an implementation of a rapid response plan, including an accelerated introduction of a second production shift at the factory, Polestar plans to recover some of the production loss it has suffered later in the year and remains confident it will deliver its targeted sales volumes for 2023 through 2025.

“We promised growth and we are delivering on that promise,” says Thomas Ingenlath, Polestar CEO.

“The fundamentals driving the growth in sales of electric cars remain in place and the momentum is stronger than the uncertainties we are witnessing right now. Any short- to medium-term economic effects have not dented our goal of selling 290,000 cars in 2025 – 10 times more than we sold in 2021,” continues Thomas Ingenlath.

“We believe our future growth will be further accelerated by our entry into the lucrative SUV market later this year with the world premiere in October of the long-awaited Polestar 3 electric performance SUV. Polestar 3, which will be manufactured in the US and China, will stand out amongst other SUV offerings and boost our strong growth trajectory to take us into our next phase.”

The SUV market is one of the highest growth and margin segments in the automotive industry, especially in the United States. Customers should be able to order Polestar 3 on the day of the premiere in October.

Polestar intends to list on the Nasdaq in a proposed business combination with Gores Guggenheim, Inc., which is expected to close in the first half of 2022.