Volvo and Polestar delay EX90 and Polestar 3, cut jobs, and drop production targets amid Tesla and BYD price war in booming electric vehicle market

The electric revolution appears to be growing steadily. According to the International Energy Agency's Global EV Outlook, the first quarter of 2023 saw a 25% jump in EV sales compared to the same time last year. It's a bit puzzling, then, that Volvo and Polestar seem to be scaling back their EV efforts. Despite Polestar's 26% delivery increase for Q1 2023, the EV maker has announced that it is increasing "cost management" and pushing back production of its latest release.

Confounding matters, Volvo is delaying the production of its EX90 electric SUV to the first half of 2024, meaning its "early 2024" availability seems unlikely. Likewise, the Polestar 3 EV that's based on the same platform will see similar production delays. Both companies cited increasing time in software development as the reason for extending the production schedule. Polestar is also cutting back its production targets for 2023 from its original 80,000 unit target to 60,000-70,000.

Despite the adjusted production forecast, Polestar still expects 16-36% growth year-over-year. More concerningly, Volvo is reportedly reducing its labour division by 10% in an effort to cut costs. Although the electric vehicle market does seem to be growing healthily, it is currently a tumultuous market. Look no further than Tesla's recent immense price cuts in response to stiffer competition from BYD, in addition to Ford's notorious US$58,000 per-unit loss on the Mach-E, to see how competitive the market has become.

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