GOTHENBURG, Sweden - Polestar (NASDAQ:PSNY), the Swedish electric vehicle manufacturer, has reported a significant increase in its global deliveries for the second quarter of 2024, with approximately 13,000 cars delivered, marking an 80% growth compared to the previous quarter. This boost brings the total deliveries for the first half of the year to 20,200 vehicles, with strong performance in the USA, Sweden, Norway, and Germany.
The company attributes this growth to a new retail model, geographic expansion, a growing vehicle lineup, and changes within its sales organization. Polestar has also completed its previously announced staff reductions, achieving a 15% reduction in positions, following a 10% cut in 2023.
Polestar's Board of Directors has seen changes with the appointment of Winfried Vahland as Board Chair and the introduction of two additional directors, Christine Gorjanc and Xiaojie Shen, who bring expertise in automotive, finance, and reporting. The company is expanding its retail footprint in Europe, transitioning to a non-genuine agency sales model, with Sweden and Norway having already made the switch in June.
Looking ahead, Polestar plans to enter seven new markets in 2025, including France and Brazil, through local distribution partnerships. Customer deliveries of the new Polestar 3 have begun and are expected to ramp up during the summer.
The company is adapting to short-term challenges such as the introduction of import duties and pricing pressure in global EV markets, including China. Despite these obstacles, Polestar remains confident in its business performance for the latter part of the year and is adjusting its business plan to achieve cash-flow breakeven by the end of 2025.
Polestar's financial results for Q1 2024 show a revenue decrease of 36% to USD 345.3 million, mainly due to lower global vehicle sales and higher discounts. The company experienced a gross loss of USD 30.8 million and an operating loss increase of 5% to USD 231.7 million. However, the company managed a financing cash inflow of USD 463.5 million, thanks to proceeds from a USD 950 million club loan facility.
This article is based on a press release statement from Polestar.
In other recent news, electric vehicle manufacturer Polestar reported an operating loss of $231.7 million in Q1, with revenue dropping to $345.3 million from the previous year's $543.4 million, amid significant tariffs on its China-produced EVs.
Despite these challenges, the company is adjusting its production strategy to lessen its dependency on Chinese manufacturing. The upcoming Polestar 3 model is set to be manufactured in the United States starting at the end of this summer, while the Polestar 4 will begin production in South Korea in the second half of 2025.
Polestar's fiscal year 2023 revenue dropped to $2.38 billion, a decrease from the $2.45 billion reported in the restated 2022 figures. The company also reported a net loss of $1.17 billion in 2023, up from $481.5 million reported in 2022. Amid these financial challenges, Polestar has initiated customer deliveries of its new electric SUV, the Polestar 3, marking a significant step in the company's expansion.
Furthermore, Polestar is set to broaden its retail footprint and enter seven new markets by 2025. The expansion includes a shift to a non-genuine agency sales model across Europe and aims to establish a presence in France, the Czech Republic, Slovakia, Hungary, Poland, Thailand, and Brazil through local distribution partnerships.
To support this growth strategy, Polestar has made key senior leadership appointments. These recent developments indicate the company's strategic direction for the coming years.
InvestingPro Insights
Polestar's (PSNY) latest delivery figures signal a robust uptrend in its operations, with a notable 80% growth in Q2 2024 deliveries. However, it's crucial for investors to consider the broader financial health and market performance of the company. According to InvestingPro data, Polestar has a market capitalization of $1.93 billion, reflecting its current valuation within the industry.
The company's challenges are reflected in a negative P/E ratio of -1.41, indicating that it is not currently generating profits from its shareholders' perspective. Moreover, the last twelve months as of Q4 2023 show a gross profit margin of -17.44%, underscoring the cost-related pressures Polestar faces. These figures align with the reported Q1 2024 gross loss of USD 30.8 million in the press release.
InvestingPro Tips suggest that Polestar operates with a significant debt burden and may have trouble making interest payments on its debt, which is a critical consideration given the company's plans for expansion and cash-flow breakeven goals. Additionally, analysts do not anticipate the company will be profitable this year, which may impact investor sentiment.
For investors looking to delve deeper into Polestar's financials and market performance, additional insights are available on InvestingPro. There are 19 more InvestingPro Tips that can help investors make more informed decisions. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and uncover the full range of expert analysis and tips for Polestar at https://www.investing.com/pro/PSNY.
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