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Polestar Automotive (NASDAQ:PSNY) was downgraded by Piper Sandler to Neutral from Overweight, as the investment banking firm expressed concern over Polestar’s relatively higher-priced models amid the ongoing price cutting among EV makers.
“To reflect this concern, we’re reducing our delivery forecast. We now expect Polestar to deliver 87k units in 2024, 128k units in 2025, and 208k units in 2026 (vs. prior estimates of 99k, 160k, and 269k),” Piper analysts said.
Apart from this, the analysts said that the recent comments from European regulators seem to warn of a coming tariff on imported Chinese electric vehicles due to state subsidies, which may impact the viability of Polestar’s models.
While Polestar is based in Sweden, its parent Geely is a Chinese company, and currently, all of Polestar’s models are made in China.
“In the end, regardless of how regulators view this issue, we think it might be simpler if Polestar was simply absorbed by Geely, rather than continuing as a quasi-independent company,” the analysts commented.
Piper Sandler added that Polestar was better positioned to relocate production, but this would be a time-consuming initiative that may put 2025 financial targets at risk in the brokerage’s view.
Seeking Alpha’s Quant rating has marked PSNY as a Hold over profitability and momentum concerns. Since the start of the year, Polestar has lost just over a quarter of its value. On a 12-month reading, Polestar has fallen about 59%.