By Akash Sriram and Marie Mannes

(Reuters) -Polestar’s CEO said on Thursday it would take longer for the Swedish EV maker to be profitable after the company reported it sold fewer cars in 2024 than it had projected, sending the company’s U.S.-listed shares down about 9% in premarket trading.

The company, backed by China’s Geely, has struggled to scale up its business amid weakening demand for electric vehicles and intensifying competition from legacy manufacturers.

Over the past year, Polestar has tried to overhaul its business, including a major management reshuffle with the appointment of industry veteran Michael Lohscheller as CEO, as well as several new executives including head of design, board chair, finance chief and chief operating officer.

Shortly after assuming his role in October, Lohscheller launched a review of Polestar’s business.

The company announced the results of that review on Thursday, saying it expects positive free cash flow after investments in 2027, much later than its previous forecast of 2025-end.

Polestar had previously expected flat revenue for 2024, but now expects a mid-teens percentage decline, and forecast negative gross margin. It is expected to report fourth-quarter results on March 6.

The company said on Thursday it had secured more than $800 million last month in 12-month term loan facilities provided by several banks, and that part of this funding will be used to repay old loans.

The new funding will take the company’s current debt to about $4.4 billion, it said.

Polestar is also working to secure an additional 12-month loan facility of $400 million that is expected to be available to the company later this month.

PATH FORWARD

Polestar’s ambitious market expansion has also been delayed. The company will start sales in France this year, instead of its earlier plan to enter seven countries in 2025.

Those expansion plans have been pushed to 2026 and beyond.

The EV maker’s updated business plan foresees compounded growth between 30% and 35% in the next three years, with positive adjusted core profit expected this year.

Polestar has worked to avoid major tariffs imposed on cars made in China, by shifting some manufacturing from the country.

While it is currently producing cars both in the U.S. and China, it is on track to make its Polestar 4 in South Korea in the second half of 2025. The company said on Thursday it expects its Polestar 7 compact SUV to be produced in Europe.

Following the launch of Polestar 7, the company said it will move to a single vehicle platform to streamline its business to reduce capital investments and development time.

Polestar was spun off from Sweden’s Volvo Cars, which ceased funding last year. The EV maker is now owned largely by Chinese automotive conglomerate Geely.

(Reporting by Akash Sriram in Bengaluru and Marie Mannes in Stockholm; Editing by Shounak Dasgupta)

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