Written by Cláudio Afonso | LinkedIn | X
The Geely-backed electric vehicle (EV) startup Polestar published on Tuesday its first-quarter financial results reporting a 36 percent decline in revenue to $345.3 million, compared to $543.4 million for the same period in 2023.
According to the brand, the drop was primarily due to lower global vehicle sales, increased discounts for inventory management, and complexities in revenue recognition for sales to its China joint venture.
The company’s gross profit fell by $54 million, resulting in a gross loss of $30.8 million. Gross margin also turned negative, reflecting the increased discounts and lower sales volume.
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 an operating cash outflow of USD 229.1 million, primarily driven by net loss adjusted for non-cash expenses and trade payables, partially offset by inventory improvements.
The company stated that had $784 million of cash and cash equivalents as of the end of the first quarter adding that has completed a 15 percent layoff earlier this year after a previous round of a 10 percent reduction in 2023.
Investing activities resulted in a cash outflow of $188.0 million, driven by investments in property, plant, equipment, and intellectual property for upcoming models Polestar 3, Polestar 4, and Polestar 5.
Financing activities generated a cash inflow of $463.5 million, supported by proceeds from a $950 million club loan facility.
Also today, the company reported the delivery of “approximately 13,000” units in the second quarter of the year. The stock price surged more than 16 percent on Monday to $0.916 per share and is currently trading nearly 4 percent lower this Tuesday following the news.
The result represents a growth of about 80 percent from the first three months of 2024 and takes Polestar’s year-to-date deliveries to 20,200 vehicles.
At 08:00 ET (14:00 CET), the company will host an earnings conference call where Polestar’s chief executive Thomas Ingenlath, and CFO Per Ansgar will address the shareholders’ concerns and provide business updates.
According to the most upvoted questions from both retail and institutional shareholders on the Say platform, the company’s demand trajectory, the impact of Volvo’s recent decision to scale back its investment in Polestar, and the stock’s performance are some of the hot topics among investors.
Here are the most upvoted questions that will be answered by Polestar’s management.
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On Sunday, Cantor Fitzgerald analyst Andres Sheppard issued a research note, maintaining the firm’s optimistic outlook on Polestar, Geely’s electric vehicle (EV) brand.
The note follows the 2023 financial results published by the EV maker last week reporting wider losses.
Sheppard reiterated the firm’s 12-month price target of $5 and the overweight rating for Polestar, stating, “Our 12-month $5 price target and Overweight rating are unchanged, pending a full model update”.
Last week, the company delivered the first units of the Polestar 3 at its headquarters in Gothenburg, Sweden. Earlier in the day, the company said it would start offering a new entry-level variant for the SUV with the introduction of a new Long Range Single Motor variant.
Earlier in the week, the EV maker launched the refreshed Polestar 2, featuring design updates, a revamped pack structure, increased range, and more individual options. Since the launch of the first iteration, the company has delivered more than 160,000 units across 27 markets.
Written by Cláudio Afonso | LinkedIn | X
