EV Production Ramps Up At Polestar, Cutting Losses In Half

While Polestar's net losses were cut in half last year, revenue rose and it tried to distinguish itself from other electric vehicle start-ups.

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The company on Thursday announced an 84% increase in revenue for 2022, which came in at approximately $2.5 billion, surpassing a target of delivering 50,000 vehicles. As a result, the company's net loss for the year decreased from more than $1 billion in 2021 to $466 million in 2012. The company's adjusted operating loss narrowed by 8% to $914 million, while its adjusted earnings before interest and taxes, depreciation, and amortization increased by 4.8% to $759 million.

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As the company plans to increase deliveries by nearly 60% to approximately 80,000 cars by 2022, CEO Thomas Ingenlath said this will be the beginning of a "different phase" in the automaker's growth.

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This increase is primarily due to Ingenlath's updated Polestar 2 EV, which is expected to make up a majority of that increase. Polestar is releasing two new electric vehicles (EVs) this year - Polestar 3 and Polestar 4 - that are expected to begin production in 2024, just in time for the start of the next century.

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“This is an exciting year for us because we are now able to offer three products at the end of the year,” Ingenlath said in a video interview with Trade Algo.

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As for 2023, Polestar expects the gross margin to be “broadly in line” with what it reported for 2022, which was 4.9%. It added that “volume and product mix is likely to support margin progression later in the year.”

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There was an increase of about 29% in the company's cash position at the end of last year, up from $973.9 million a year earlier. CFO Johan Malmqvist said the company is actively exploring the possibility of raising additional capital through equity or debt offerings in order to fund ongoing operations and the expansion of the business.

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The company's CEO, Malmqvist, declined to comment on the company's expectations regarding when it will break even or turn a profit, instead saying, "We remain confident in the fundamentals of our business, so we have the levers and the building blocks to get to breakeven by the end of the year.".

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A relatively positive result from Polestar, coming at a time when other EV startups, such as Lucid, Nikola, and Rivian, have reported ongoing production and supply chain issues, resulting in them missing their production and sales targets.

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Polestar is the result of a joint venture between Volvo Cars of Sweden and its parent company, Geely, which is based in China. By merging with a special purpose acquisition company in June of this year, Polestar became a public company.

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The share price of Polestar has fallen by 49% since the company went public. Shares of the company fell more than 5% on Wednesday, closing the day at $5.05 per share.

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