The chief executive and founder of European Tesla rival Polestar has quit after seven years at the helm.

Polestar, which is controlled by Sweden’s Volvo and China’s Geely, confirmed on Wednesday the resignation of long-time boss and founder Thomas Ingenlath. He will be replaced from Oct 1.

His resignation comes after sales of the Swedish company’s upmarket electric cars slumped. Global volumes fell 40pc in the first quarter of 2024 to 7,221, down from 12,076 the previous year.

Once valued at more than $20bn (￡15bn), Polestar’s valuation has plummeted to around $2bn since it went public in 2022. Its shares, listed in New York, are down 41pc this year alone.

The carmaker, headquartered in Gothenburg in Sweden, lost close to $1.5bn over the course of 2023.

Originally starting life as a prototyping division of Volvo, developing concept models and touring car racers, Polestar was launched as a standalone marque in 2017. It was billed as Europe’s answer to Tesla.

Vehicles such as the Polestar 2 electric hatchback received a positive reception from critics.

However, Matthias Schmidt, an analyst at Schmidt Automotive Research, said Polestar had struggled to turn its critical acclaim into mass sales.

In February, Volvo announced it would no longer be providing financial support to Polestar, offloading part of its 48pc stake to Geely, its Chinese parent company.

The carmaker secured a near-$1bn loan from a consortium of banks after Geely agreed to continue to support the company. In January, Polestar said it would cut around 15pc of its staff globally, equating to about 450 people.

Mr Schmidt said: “With the tide turning and both financial markets [and] Geely and Volvo Cars becoming increasingly impatient with Polestar’s inability to move beyond a low-volume niche brand to becoming a higher-volume premium heavyweight, it appears they are changing tack.”

Mr Ingenlath will be replaced by Michael Lohscheller, a former Volkswagen executive. Winfried Vahland, Polestar’s incoming chairman, said the change coincided with the carmaker leaving its “start-up phase”.

He said: “Developing a coherent product strategy and strengthening the global market presence will be instrumental in the next chapter of Polestar’s growth.”

Mr Vahland added: “Geely remains deeply committed to Polestar’s success.”

Demand for EVs has slowed across Europe after a jump in inflation. Prices of typical electric cars remain high compared to their petrol alternatives while consumers are still cautious over range anxiety.

In March, Mr Ingenlath told The Telegraph people were “hesitating” on buying an EV because they were “scared of change”.