Summary
- Polestar PSNY reported a quarterly operating loss of $242.3 million, a narrower loss compared to the previous year
- Revenue fell by 17% to $574.9 million due to lower global volumes and higher discounts
- The company delivered about 13,000 EVs last quarter, an 80% increase compared to the first quarter
- Polestar secured an extra $300 million in funding through a one-year term loan in August
- The automaker has faced challenges including high costs, missed delivery goals, weaker than expected demand, and new tariffs from countries like Canada, the U.S., and the E.U. on EVs made in China
Article
Polestar PSNY reported another significant quarterly loss, following the replacement of its longtime CEO. The Swedish electric vehicle maker reported a quarterly operating loss of $242.3 million, a slight improvement from the previous year. Revenue also decreased by 17% to $574.9 million due to lower global volumes and higher discounts. Like other companies in the EV industry, Polestar has struggled to achieve profitability, facing high costs, missed delivery goals, and weaker demand. Despite delivering 13,000 EVs last quarter, an 80% increase from the previous quarter, sales were down 18% year-over-year.
To address funding issues, Polestar secured an additional $300 million in funding through a term loan from a bank in August. With cash and cash equivalents totaling $669 million at the end of June, the company saw a decrease from $784 million in March. Co-founder Volvo Cars halted funding for the EV maker, but continued support from parent company Geely Auto, a Chinese automaker, has helped alleviate financial pressures. Polestar announced the appointment of Michael Lohscheller, a former executive at Opel and Vinfast, as its new CEO, replacing Thomas Ingenlath who had been with the company since its launch in 2017.
Polestar faces new challenges in the form of tariffs imposed by countries like Canada, the U.S., and the E.U. on China-made EVs. Both Canada and the U.S. have plans to impose 100% tariffs on China-made EVs, while the E.U. has proposed increasing tariffs on Geely’s products. Polestar is in discussions with the E.U. to find ways to mitigate the impact of these tariffs. In an effort to reduce exposure to these tariffs, Polestar has started production of its Polestar 3s in South Carolina at a Volvo factory. The first vehicles made in the U.S. are expected to reach buyers in the coming weeks. Despite these efforts, Polestar stock has fallen by more than 45% in 2024, with a further 9% decline in pre-market trading following the earnings report.
As an electric vehicle manufacturer, Polestar’s financial performance is closely tied to industry trends and regulatory challenges. The company’s struggles to achieve profitability mirror those of other EV makers, as they navigate high costs and fluctuating demand. The appointment of a new CEO brings fresh leadership to guide Polestar through these challenges and secure its financial future. By diversifying production locations and engaging in dialogue with regulatory bodies, Polestar aims to mitigate the impact of tariffs on its business and continue delivering innovative electric vehicles to consumers worldwide. Despite the current financial setbacks, Polestar remains committed to its mission of developing sustainable mobility solutions for the future.
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