Recently, industry sources claimed that Polestar plans to conduct large-scale layoffs by the end of September, with an expected layoff ratio of about 30%, primarily affecting employees in production and supply roles. Is this mere gossip or a factual occurrence? Not long ago, the factory in Chengdu was closed, leaving many wondering if Polestar can survive in the Chinese market.

On July 9, Polestar refuted these rumors and stated that the aforementioned information was untrue, adding that preparations for the new headquarters in Nanjing were underway. Public records show that as early as January 3, 2024, the Polestar Technology China headquarters project was signed to settle in Nanjing Jiangning Development Zone. With the support of the Nanjing Municipal Government, Polestar Technology will establish its China headquarters in Nanjing.

According to media reports, in addition to relocating its headquarters to Nanjing, Polestar has also been exposed to have shut down its Chengdu factory, with production transferred to the Polestar Chongqing factory and Geely factory, resulting in a significant number of layoffs among production and supply staff.

Polestar stated that the company will establish a headquarters project in Nanjing integrating R&D, operations, procurement, sales, and delivery centers. The preparation of the new headquarters involves organizational restructuring, team relocation, and changes to some relevant personnel. Meanwhile, the personnel changes resulting from the preparation of the new Nanjing headquarters do not involve the Polestar Chengdu factory, which, along with supply chain adjustments, were part of the company's earlier strategic planning adjustments and were completed last year.

Therefore, the current rumors about Polestar do not conform to the facts.

It is understood that as early as January this year, Polestar announced a 15% global layoff, affecting approximately 450 employees. The layoffs aimed to adjust business and operational scale, reduce external expenses, increase profitability, and achieve cash flow balance by 2025. However, when announcing the 15% global layoff, Polestar also stated that "this global layoff does not involve the Chinese market."

Polestar CFO Johan Malmqvist said that the company is working to reduce operating expenses. Malmqvist noted that the company is "taking targeted measures with our workforce" and added, "Given the current macroeconomic environment, the company is seeking to control costs."

In fact, despite significant price reductions, the Polestar 4, which has yet to establish a strong brand presence, still faces considerable pressure in China's increasingly competitive electric vehicle market. It is reported that to further enhance its competitiveness, Polestar recently upgraded the terminal incentives for the Polestar 4, offering discounts of up to RMB 60,000.

"We have launched 'Exclusive Benefits for Polestar 4,' including a RMB 30,000 experience officer benefit, a limited-time trade-in fund of up to RMB 30,000, and a limited-time stacked benefit of RMB 35,000, equivalent to a maximum cash discount of RMB 60,000. Among them, the single-motor version offers a trade-in subsidy of RMB 20,000, and the dual-motor version offers RMB 30,000, plus the experience officer policy with a subsidy of RMB 30,000, credited to the personal account in four installments of RMB 7,500 each. However, the RMB 299,900 model does not have a discount deduction and requires an additional purchase of a RMB 30,000 plus luxury package. This brings the single-motor plus version to RMB 279,900, while the same-configured model sells for RMB 339,900, equivalent to a discount of RMB 60,000," a Polestar salesperson in Shanghai told the media. For the implementation of the trade-in subsidy, the manufacturer's requirements are not strict, requiring only a property certificate photo, not a genuine trade-in.

Ifeng Finance disclosed that Polestar may face delisting risks. On July 2, Polestar released unaudited preliminary financial and operational results for the first quarter of 2024. In the first quarter of this year, Polestar's revenue was US$345.3 million, a year-on-year decline of 36%; gross margin turned negative, falling from 4.3% in the same period last year to -8.9%; operating losses widened from US$220 million in the same period last year to US$232 million; net losses were US$274 million, compared to US$37.694 million in the same period last year. In the first quarter of this year, Polestar's deliveries declined by 40% to 7,200 vehicles. Roughly estimated, Polestar lost over RMB 2.7 million per vehicle sold in the first quarter of this year.

Not long ago, Polestar was also exposed to significant senior personnel changes. In June this year, it was reported that Håkan Samuelsson, the company's Chairman of the Board, would step down, and Winfried Vahland has been appointed as Samuelsson's successor, with the appointment taking effect after the company's annual general meeting. Prior to this, Vahland served as CEO and President of Volkswagen Group China, CEO of Škoda Auto, and a member of the Volvo Cars Board of Directors.

In China, two former senior executives from Volvo also joined Polestar Technology.

Lanjing News learned from within Polestar that in June this year, Qin Peiji, former Deputy General Manager of Geely Automobile Group Sales Company, joined Polestar Technology, responsible for the company's sales, channel development, marketing, after-sales, and other business segments.

According to his previous resume, he joined Volvo Cars in 2011 and has held positions such as Vice President of Sales and Dealer Network for Volvo Cars Greater China, Chief Operating Officer of Volvo Cars Greater China Sales Company, and was appointed President of Volvo Cars Greater China Sales Company in 2019. In August 2023, it was reported that he left Volvo to join Geely.

The aforementioned insider also revealed to Lanjing News that Jia Xiaohui, former Senior Director of Public Relations at Volvo Cars Greater China Sales Company, has also joined Polestar Technology as Vice President of the User Development Center, rather than the rumored CMO (Chief Marketing Officer).

Behind the shakeup of middle and senior management, it remains to be seen whether the new team can bring more new momentum to Polestar.

However, cost control measures such as layoffs have not immediately reversed Polestar's financial difficulties. The company's share price continued to decline after the earnings release. As of July 1, Eastern Time, Polestar's share price has been below US$1 for 28 consecutive trading days, facing the risk of delisting from Nasdaq. According to Nasdaq Stock Exchange rules, if the company's closing price remains below US$1 for 30 consecutive trading days, it will receive a delisting notice. Polestar must achieve a closing price above US$1 for 10 consecutive trading days within the next 180 days; otherwise, its stock will be suspended and ultimately delisted.

Beyond the risk of delisting, Polestar's most pressing issues at present are declining sales and expanding losses. Although the company has attempted to address market challenges through product price adjustments and management changes, Polestar's sales performance remains poor.

According to relevant data, from 2021 to 2023, Polestar's global sales increased from 10,200 units to 54,600 units, but its performance in the Chinese market was particularly sluggish, declining from 2,048 units to less than 1,000 units.

In response to these issues, Polestar has attempted to boost sales through the launch of new models and price adjustments, but market reaction has been less than ideal. Additionally, frequent management changes have failed to bring about significant improvements. Nevertheless, since its inception, Polestar has been committed to innovation and development, with models such as Polestar 1 to Polestar 6 continuing to be promoted and sold in the market.

Last year, the head of a new force automaker predicted that the elimination race for smart electric vehicles would officially begin from 2024 to 2027. Although Polestar is backed by the Geely Group and unlikely to suddenly collapse like some new forces, the time left for Polestar may not be much. In the future, Polestar needs to address fierce market competition and operational challenges to ensure the long-term stability and development of the enterprise.