Written by Cláudio Afonso | LinkedIn | X
Polestar, the Geely-backed electric vehicle (EV) maker, reported concerning first-quarter financial results on Tuesday despite better-than-expected sales numbers for the second quarter.
As of March 31, the company held $784 million in cash and cash equivalents. Polestar reported an operating cash outflow of $229.1 million for the first quarter. The company mentioned that was due to “net loss adjusted for non-cash expenses and trade payables, partially offset by inventory improvements.”
Backed by China’s giant Geely Holding Group and Volvo, Polestar is expected to secure further funding over the next months.
During the earnings conference call held on Tuesday, CFO Johan Ansgar highlighted the support from major shareholders like Geely and Volvo Cars.
“Earlier this year, our ultimate owner Geely Holding has also expressed strong support to our business. So we’re in constant dialogue with both them and Volvo Cars and others just to let them know our funding position. So I’m very confident around all these things here.”
“We expect to see more working capital improvements in the second quarter and going forward,” Ansgar added.
Ansgar reiterated the goal of achieving cash flow break-even by the end of 2025, “Our clear objective is to get to cash flow breakeven by the later part of 2025.”
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CEO Thomas Ingenlath expressed confidence in Polestar’s future, highlighting strong product reviews.
“Our two new SUVs have received stellar reviews and test drive slots are booked out. Our retail model shift is in execution, and we have strengthened our sales management team significantly,” Ingenlath said.
Revenue for Q1 2024 declined by 36% year over year to $345.3 million, compared to $543.4 million in the same period of 2023.
Polestar has implemented several strategic cost and headcount reductions to improve efficiency. “We initiated two rounds of strategic cost and headcount reductions in mid-2023 and then followed up with another one in early 2024. We are starting to see the benefit come through now,” the CFOAnsgar noted.
As an outlook, Polestar warned that pricing pressure from its competitors continues to impact sales.
“Though the business has increasing momentum, there are short-term impacts from the introduction of import duties, alongside continued pricing pressure in global EV markets, including China,” the company stated.
The company reported the delivery of “approximately 13,000” units in the second quarter of the year, representing a growth of about 80 percent from the first three months of 2024 taking Polestar’s year-to-date deliveries to 20,200 vehicles.
Written by Cláudio Afonso | LinkedIn | X
