Polestar publishes results for the first quarter and reports 80% growth in global deliveries for the second quarter

• 7,200 cars delivered in Q1 2024; cash and cash equivalents of USD 784 million as of March 31, 2024
• 20,200 cars delivered year to date, with Q2 2024 up 80% compared to Q1 2024
• New retail model, geographic expansion, growing line-up and sales organisation changes driving future sales growth
• Announced staff reductions completed, resulting in 15% fewer positions, in addition to 10% reduction in 2023

Polestar, reports its preliminary unaudited financial and operational results for the three months ended March 31, 2024 and reports its global deliveries for the second quarter of 2024.

Polestar delivered approximately 13,000 cars in the second quarter, a growth of 80% compared to the previous quarter. This takes global deliveries for the first six months of the year to 20,200 with USA, Sweden, Norway and Germany delivering a strong momentum. 

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Thomas Ingenlath, Polestar CEO, said: “We have strong momentum as we enter the second half of the year. Our two new SUV’s have received stellar reviews from the global media and first test drive slots were booked out and additional slots are filling up fast. Our retail sales model shift is accelerating in Europe and we have strengthened our sales management team.

Production of Polestar 3 in South Carolina is on-track to start at end of the summer and production of Polestar 4 is set to start in South Korea in the second half of 2025, diversifying our manufacturing footprint and mitigating impacts of the announced tariffs.

We expect strong revenue improvement in the second quarter and are confident about our business performance in the latter part of the year. Looking further ahead, our model expansion and increased market presence – with seven new market launches to come in 2025 – will be key growth drivers for us.”

Recent developments:

• Polestar’s Board of Directors has appointed Winfried Vahland Board Chair, succeeding Håkan Samuelsson who intends to retire after the upcoming AGM.
• Board of Directors is further strengthened with the appointment of two additional directors (subject to approval at the upcoming AGM) with Christine Gorjanc and Xiaojie Shen (Laura) bringing significant automotive, finance and reporting expertise.
• Carla De Geyseleer, Audit Committee Chair, has chosen to focus on her executive role and will not stand for re-election as Director. Christine Gorjanc has been proposed as Audit Committee Chair.
• Polestar is widening its retail footprint with existing and new partners, as part of a shift to a non-genuine agency sales model across Europe. Sweden and Norway switched to a non-genuine agency sales model in June with other key markets set to follow suit in the second half of the year. 
• Strengthened sales management team with strategic appointments in key markets, driving sales growth with increased market presence.
• Accelerated geographic expansion plans to enter seven new markets during 2025, France, Czech Republic, Slovakia, Hungary, Poland, Thailand and Brazil via local distribution partnerships.

• Global press drive for Polestar 3 and Polestar 4 has resulted in stellar reviews across key markets.
• Customer deliveries of Polestar 3 have started and will ramp-up during the summer.
• Staff reductions announced in January now implemented, resulting in 15% fewer positions, in addition to 10% reduction in summer of 2023.
• Reduction in supply chain emissions by integrating renewable fuels for ocean freight and inbound component supplies.
• Polestar and StoreDot successfully charge Polestar 5 prototype from 10-80% in 10 minutes.
• Polestar and Plugsurfing have launched Polestar Charge, adding over 650,000 compatible Polestar car charging points for our customers.
• Partnership announced with Zaptec, offering customers home charging solutions as part of their Polestar ownership experience.

Outlook

Sales momentum seen in the second quarter had a positive impact on inventory levels and cash flow. Polestar remains confident of an even stronger uptick in deliveries through the second half of the year, as sales of the two premium SUVs build.

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.

In light of these factors and to meet its target of cash-flow breakeven towards the end of 2025, Polestar is adapting its business plan, including implementing additional mitigating actions, and expects to provide updated guidance later in the year.

Conference call and upcoming events

Polestar management will hold a live audio webcast today 2 July, 2024 at 08:00 US Eastern time (14:00 Central European Summer Time). The live audio webcast will be available at https://investors.polestar.com/events/event-details/q124-results-webcast.

Following the completion of the call, a replay will be available at https://investors.polestar.com/.

Polestar expects to post its preliminary unaudited financial and operational results for the first six months of the year on Thursday, 29 August 2024, before market open in New York. A live audio webcast is scheduled to start at 08:00 US Eastern Time (14:00 Central European Summer Time). From Thursday, 15 August 2024, verified shareholders will be able to ask questions through the Say Technologies platform accessible via the Polestar investor relations website.

Key financial highlights

The below table summarises key preliminary, unaudited financial results for the three months ended March 31, 2024.

• Revenue decreased by USD 198.1 million or 36% mainly due to lower global vehicle sales, higher discounts driven by inventory management actions as well as complexities pertaining to revenue recognition on sales of cars to China JV.
• Gross result decreased by USD 54 million to a gross loss of USD 30.8 million with lower vehicle sales and higher discounts.
• Selling, general and administrative expenses were slightly down, with active cost management actions offsetting costs for promotional activities related to commercial campaigns and events for Polestar 3 and Polestar 4 global launches.
• Research and development expenses decreased by USD 23.9 million or 67% to USD 11.8 million mainly due to higher capitalization of internal development program expenditures for future car models and Polestar 2 IP amortization now being capitalized in inventory. We continue to invest in future vehicles and technologies.  
• Other operating income increased by USD 16.2 million to USD 23.1 million, primarily due to positive foreign exchange effects on working capital and sales of services to related parties.
• Operating loss increased by USD 11.8 million or 5%, with lower revenue only partially offset by active cost management actions and higher other operating income.

Cash flow highlights

The below table summarises cash flow for the three months ended March 31, 2024.

• Operating cash outflow of USD 229.1 million, mainly driven by net loss adjusted for non-cash expenses and trade payables and partly offset by inventory improvement.
• Investing cash outflow of USD 188.0 million, predominantly driven by higher property, plant and equipment investments as well as intellectual property investments for Polestar 3, Polestar 4 and Polestar 5, as well as USD 24.5 capital injection into China JV.
• Financing cash inflow of USD 463.5 million, with proceeds from USD 950 million club loan facility, partially offset by principal repayments on borrowings and trade financing facilities.

Preliminary key operational highlights 

The below table summarises key preliminary operational results as of the three months ended March 31, 2024.

• 1.Represents the sum of total volume of vehicles delivered for (a) external sales of new vehicles without repurchase obligations, (b) external sales of vehicles with repurchase obligations, and (c) internal use vehicles for demonstration and commercial purposes or to be used by Polestar employees (vehicles are owned by Polestar and included in inventory). A vehicle is deemed delivered and included in the volume figure for each category once invoiced and registered to the external or internal counterparty, irrespective of revenue recognition. Revenue is recognized in scenarios (a) and (b) in accordance with IFRS 15, Revenue from Contracts with Customers, and IFRS 16, Leases, respectively. Revenue is not recognized in scenario (c).
• 2.Represents the markets in which Polestar operates.
• 3.Represents Polestar Spaces, Polestar Destinations, and Polestar Test Drive Centres.
• 4.Represents Volvo Cars service centres to provide access to customer service points worldwide in support of Polestar’s international expansion.

• Global volumes decreased 4,855 to 7,221 cars, with the decline in the USA driven by the lower demand and the absence of Hertz sales. Sales mix improved, with fleet sales declining in favour of increased Retail sales. There was also an increased impact of used cars in our mix as they come into inventory in more meaningful way.
• Polestar now has 182 locations and 1,173 service points across its markets, up with 38 and 56 respectively when compared to the three months ended March 31, 2023.