Oct 11 (Reuters) - Polestar's chief executive

said on Friday the company is conducting a strategic review of

its operations after reporting a 14% drop in third-quarter

electric vehicle deliveries, sending shares of the Swedish

company down nearly 6%.

Polestar, which is majority owned by China's Geely

, has been grappling like rival EV makers with

weakening demand for its vehicles owing to factors such as high

interest rates, prompting consumers to pivot to cheaper hybrid

cars.

The company handed over 11,900 vehicles in the third quarter

compared with 13,900 vehicles a year ago.

Polestar recently went through a major reshuffle where it

replaced its CEO, head of design, chair of the board and

appointed a new CFO.

Polestar said it expects revenue for the full year to remain

stagnant owing to the difficult market conditions and the import

duties. In 2023, the company recorded revenue of $2.38 billion.

New CEO Michael Lohscheller, in his first public statement

since taking over on October 1, announced a strategic review to

"set out a clear path for Polestar's development", with an

update on January 16 along with its third-quarter financials.

"A key to our future success will be the development of our

commercial capabilities: going from showing to actively selling

cars. Adopting a more active sales model is already supporting

our ambitions, as the first markets to implement it are showing

solid order intake," Lohscheller said.

Polestar reaffirmed its target of achieving break-even cash

flow by the end of next year, though at a lower volume than

previously targeted.

The levy of U.S. and European tariffs on Chinese imports has

pressured Polestar to grow its production base in the United

States and away from China where it currently makes most of its

vehicles.

To combat slowing demand, Polestar has been cutting costs by

reducing headcount and negotiating with suppliers to reduce the

price of manufacturing across its product lines.

The company said in August it reached the target of

achieving $1.3 billion in external funding, after facing acute

financial challenges at the start of the year when its major

backer Volvo Cars said it would stop funding.

On Friday, it said due to the current market conditions and

the anticipated performance, it was engaged in constructive

dialogue with its club loan lenders, who remain supportive of

its loan covenants.