Swedish electric vehicle (EV) maker Polestar said on Thursday (May 11) it had lowered its 2023 production guidance and would cut headcount by 10 per cent, citing a delayed production start for its Polestar 3 and a challenging environment for the industry.

The automaker said it now expects volumes to be between 60,000 to 70,000 cars this year, versus the 80,000 it had previously predicted.

It has been a tough quarter for EV startups, who face mounting competition from new Chinese players as well as from more established brands. An ongoing price war started by Tesla, in addition to high interest rates, has put a further squeeze on the already cash-strapped startups.

Polestar peers such as Lucid and Fisker have both cut their production forecasts, with Lucid in March also trimming 18 per cent of its workforce.

The Swedish carmaker, founded by China’s Geely and Volvo Cars, posted a first-quarter operating loss of US$199.4 million, narrowing from a loss of US$257.9 million a year ago. Reuters