Dive Brief:
- Polestar Automotive, the Swedish electric vehicle maker founded by Volvo Cars and its parent company Geely, said Thursday that it earned $685 million in revenue in the second quarter of 2023, a 16% year-over-year increase, missing analyst expectations by nearly $71 million.
- The automaker credited higher Polestar 2 vehicle deliveries and price increases for boosting its revenue. It delivered 15,765 vehicles in Q2, a 36% YoY increase.
- Polestar plans to deliver 60,000 to 70,000 vehicles in fiscal year 2023, with a 4% gross margin. It delivered 27,841 vehicles in the first half of the year.
Dive Insight:
During the company’s earnings call, Polestar CFO Johan Malmqvist said fewer supply chain disruptions and lower raw material costs had improved profitability. Investors “should expect to see a gradual improvement” in gross margin, he said.
Other automakers, including Honda, have increased sales and profits as new vehicle inventories rise due to supply chain improvements.
Polestar CEO Thomas Ingenlath said in a statement that the company expects its production volume to increase, which may bolster its finances. Polestar 2 production is “ramping up,” Ingenlath said, while the Polestar 4 and 3 will begin production in November and Q1 2024, respectively.
The automaker lost $1 million in gross profit during Q2. It blamed higher contract manufacturing expenses, semiconductor costs, and battery and inventory supply problems for the loss.
Polestar said its operating losses decreased by $356 million compared with the same period last year, a 56% YoY decline.
The cash-poor automaker has a cash balance of about $1 billion and is “working on multiple options to address the broader funding need,” according to a Polestar earnings presentation.
“There's no change in the strategy,” Malmqvist said. “We are continuing to work on the overall cost structure, taking a hard look at not only the [operating expenses] but also the gross margins.”
He said the automaker would provide more details during its next earnings call.
