Polestar ups revenue and deliveries

Polestar says revenue of US$613 million is 41% up year-on-year and that 13,976 cars were delivered – a 51% rise.

It reports cash and cash equivalents of US$951 million as of September 30, 2023, adding Q3 increased revenue of US$367.7m (25%) was mainly driven by price increases to model year 2023 and model year 2024 vehicles with continued vehicle sales expansion across markets.

Gross profit decreased US$36.3 million (63%) as the result of higher contract manufacturing, warranty, and freight costs, irregular supplier charges related to batteries and semiconductors, and increased inventory impairment.

“This decrease was partially offset by favourable impacts of price increases established in the second half of 2022.”

Selling, general and administrative expenses increased US$59.5m (10%) primarily due to higher advertising, selling, and promotional activities mainly related to media campaigns across European markets and marketing productions for the Polestar 3 and 4, the brand adds.

Research and development expenses increased US$12.8m (10%) due to increases in headcount costs for full-time employees, Polestar explains.

“This increase was offset by lower amortisation of intellectual property related to the Polestar 2 following a revision in the estimated useful life and recognition of sunk costs related to the P10 powertrain, which were incurred in March and June 2022.”

Polestar says other operating income net increased by US$82.8 million (461%) mainly driven by positive foreign exchange effects on working capital and a recognition of a gain on the sale of the Chengdu manufacturing plant.

Operating loss decreased by US$346.6m (32%) impacted by a Q2 2022 one-time share-based listing charge of US$372.3m.

Adjusted operating loss increased US$25.7m (4%) primarily due to lower gross profit during the nine months ended September 30, 2023, the brand adds.

Polestar has presented a strengthened business plan which targets an accelerated margin improvement and a reduction of the company’s total funding need to the point of cash flow break-even in 2025.

For the fiscal year 2025, Polestar is targeting a gross margin in the high teens with a total annual volume of about 155,000-165,000 cars.

“This is expected to be achieved through a richer product mix, with four models in production, reduced cost structure and refocused approach to key markets including a new joint venture in China and measures to improve profitability in the US business.”

By having taken the necessary steps to re-work our business plan, we are reducing costs and improving efficiencies to create a more resilient and profitable Polestar – and reducing our funding need at the same time,” says Polestar chief executive Thomas Ingenlath.

Geely Holding and Volvo Cars have provided additional liquidity to the company.

Polestar expects it will require external funding of about US$1.3 billion until achieving cash flow break-even, targeted in 2025.

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The Polestar Day technology and innovation event is in Los Angeles on November 9 with highlights on the investor relations website in coming days.