Polestar’s announcement in August that it was switching CEOs provided a window on the ailing condition of the electric car start-up spun out of Volvo.
The CVs of the two CEOs were instructive. Out went former design boss Thomas Ingenlath and in came former chief financial officer Michael Lohscheller.
Ingenlath had been promoted from his role as head of design of Volvo in 2017 to form a new electric subsidiary with aesthetics at its core.
Seven years on, Polestar products have the looks and quality to match those of a mature car company. But as the appointment of industry veteran Lohscheller suggests, the company’s finances are as bad as any start-up's.
Lohscheller, former CFO and then CEO of Opel, has become a go-to guy for embattled start-ups looking for solid guidance from an wily old industry hand. Since leaving Opel in 2021, he spent seven months as global CEO of Vietnamese brand Vinfast, then 19 months as president and CEO of infamous fuel cell hopeful Nikola.
Lohscheller’s fast cycling between jobs suggests he’s either become a short-term turnaround specialist or didn’t gel with those particular start-ups. Either way, he’s got insight into both ends of the automotive spectrum.
Polestar has suffered as badly as any electric start-up without actually hitting the buffers, Fisker-style. It got so bad that in February, Volvo decided it had to reduce its financial exposure to Polestar by cutting its stake from 48% to 18% and handing over the balance of shares to parent Geely.
Then in May, Polestar received a deficiency notice from New York tech-focused stock exchange Nasdaq for not having filed its annual report for the previous year on time. It eventually filed in mid-August, showing a net loss of $1.2 billion (£0.9bn) on revenue of $2.4bn (£1.8bn).
Sales of its single vehicle – the 2 electric saloon - have fallen, even in the UK where it competes in the EV-friendly corporate market. Registrations to the end of August in 2024 stood at 3863, down from 8981 the year before.
More bad news followed in July, when Polestar received a warning that its shares had fallen below the minimum $1 worth and faced delisting from Nasdaq. In August, the company’s value based on its share price was just $1.14bn (£0.87bn), down from a high in 2022 of more than $21bn (£16bn).
“Material uncertainty about Polestar's ability to continue as a going concern persists,” the company said in its delayed financial report.
Polestar could have fallen into the same doom spiral as Fisker but it is far more fortunate in that it benefits from the support and influence of parent Geely. In February, Polestar announced that it had secured $950 million (£725m) in funding from a range of international banks, keeping the money flowing until such time as it can reliably generate its own.
Add your comment