Polestar Automotive Holding UK PLC (Nasdaq: PSNY), the Swedish
electric performance car brand, today presents a strengthened
business plan which targets an accelerated margin improvement and a
reduction of the Company’s total funding need to the point of cash
flow break-even in 2025.
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the full release here:
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Polestar 2, Polestar 3, Polestar 4,
Polestar 5 (Photo: Business Wire)
In light of a fast-changing operating environment, Polestar has
introduced a strengthened business plan that reorients a path to
profitability by prioritising margin progression over volume. For
the fiscal year 2025, Polestar is targeting a gross margin in the
high teens with a total annual volume of approximately
155,000-165,000 cars. This is expected to be achieved through a
richer product mix, with four models in production, reduced cost
structure and refocused approach to key markets including a new
joint venture in China and measures to improve profitability in the
US business. Polestar has already implemented cost reduction
measures announced earlier this year around headcount reductions
and continues to advance active cost management efforts.
Thomas Ingenlath, Polestar CEO, says: “By having taken the
necessary steps to re-work our business plan, we are reducing costs
and improving efficiencies to create a more resilient and
profitable Polestar – and reducing our funding need at the same
time.
“Achieving cash flow break-even already in 2025 will show the
strength of our asset-light business model. Margin over volume is
our way forward, supported by a gorgeous line-up of four exclusive
performance cars.”
Showing their continued commitment to Polestar, Geely Holding
and Volvo Cars have provided additional liquidity to the Company.
Pursuant to an amendment to its existing shareholder term loan,
Volvo Cars has extended the maturity of its outstanding term loan
by over three years to June 2027, and provided an aggregate of $200
million in additional loan capacity with the same maturity date,
bringing the total investment to $1 billion. In addition, Geely
Sweden Automotive Investment AB (an affiliate of Geely Holding) is
making available a $250 million term loan on substantially the same
terms as Volvo Cars, including the maturity in June 2027.
Both loans have an optional equity conversion feature.
Based on the reduced funding need from a strengthened business
plan and new and existing financing and liquidity support from
Geely Holding and Volvo Cars, Polestar expects it will require
external funding of approximately $1.3 billion until achieving cash
flow break-even, targeted in 2025.
Working alongside its major shareholders, Polestar is
well-progressed on a holistic financing plan to provide the
remainder of funding required, including additional debt and
equity.
Polestar management will hold a live audio webcast today, 8
November 2023 at 14:00 PT (17:00 ET or 23:00 CET). The live audio
webcast will be available at
https://investors.polestar.com/events/event-details/q323-results-webcast
Following the completion of the call, a replay will be available
at https://investors.polestar.com/.
Note: Polestar Day, a technology and innovation event, takes
place in Los Angeles on 9 November. The keynote presentations and
technology deep dive highlights will be made available on the
investor relations website in the coming days.
About Polestar
Polestar (Nasdaq: PSNY) is the Swedish electric performance car
brand determined to improve society by using design and technology
to accelerate the shift to sustainable mobility. Headquartered in
Gothenburg, Sweden, its cars are available online in 27 markets
globally across North America, Europe and Asia Pacific. The company
plans to create a truly climate-neutral production car, without
offsetting, by 2030.
Polestar 2 launched in 2019 as the electric performance fastback
with avant-garde Scandinavian design and up to 350 kW. Polestar 3
launched in late 2022 as the SUV for the electric age – a large
high-performance SUV that delivers sports car dynamics with a low
stance and spacious interior. Polestar plans to release three more
electric performance vehicles through to 2026.
Forward-Looking Statements
Certain statements in this press release (“Press Release”) may
be considered “forward-looking statements” as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally relate to future events or the future
financial or operating performance of Polestar including the number
of vehicle deliveries and gross margin. For example, projections of
revenue, volumes, margins, cash flow break-even and other financial
or operating metrics and statements regarding expectations of
future needs for funding and plans related thereto are
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may”, “should”,
“expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”,
“predict”, “potential”, “forecast”, “plan”, “seek”, “future”,
“propose” or “continue”, or the negatives of these terms or
variations of them or similar terminology. Such forward-looking
statements are subject to risks, uncertainties, and other factors
which could cause actual results to differ materially from those
expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Polestar and its
management, as the case may be, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, but are not limited to: (1) Polestar’s
ability to maintain agreements or partnerships with its strategic
partners, such as Volvo Cars, Geely or Xingji Meizu Group, and to
develop new agreements or partnerships; (2) Polestar’s ability to
maintain relationships with its existing suppliers, source new
suppliers for its critical components and enter into longer term
supply contracts and complete building out its supply chain, while
effectively managing the risks due to such relationships; (3)
Polestar’s reliance on its partnerships with vehicle charging
networks to provide charging solutions for its vehicles and its
reliance on strategic partners for servicing its vehicles and their
integrated software; (4) Polestar’s reliance on its partners, some
of which may have limited experience with electric vehicles, to
manufacture vehicles at a high volume or develop devices, products,
apps or operating systems for Polestar, and to allocate sufficient
production capacity or resources to Polestar in order for Polestar
to be able to increase its vehicle production capacities and
product offerings; (5) the ability of Polestar to grow and manage
growth profitably including expectations of growth and financial
performance by generating expected revenues at expected selling
prices, maintain relationships with customers and retain its
management and key employees; (6) Polestar’s estimates of expenses,
profitability, gross margin, cash flow, and cash reserves; (7)
increases in costs, disruption of supply or shortage of materials,
in particular for lithium-ion cells or semiconductors; (8) the
possibility that Polestar may be adversely affected by other
economic, business, and/or competitive factors; (9) the effects of
competition and the high barriers to entry in the automotive
industry, and the pace and depth of electric vehicle adoption
generally on Polestar’s future business; (10) changes in regulatory
requirements, governmental incentives and fuel and energy prices;
(11) the outcome of any legal proceedings that may be instituted
against Polestar or others, adverse results from litigation,
governmental investigations or audits, or tax-related proceedings
or audits; (12) the ability to meet stock exchange listing
standards; (13) changes in applicable laws or regulations or
governmental incentive programs; (14) Polestar’s ability to
establish its brand and capture additional market share, (15) the
risks associated with negative press or reputational harm,
including from lithium-ion battery cells catching fire or venting
smoke; (65) delays in the design, development, manufacture, launch
and financing of Polestar’s vehicles and other product offerings,
and Polestar’s reliance on a limited number of vehicle models to
generate revenues; (16) Polestar’s ability to continuously and
rapidly innovate, develop and market new products; (17) risks
related to future market adoption of Polestar’s offerings; (18)
risks related to Polestar’s distribution model; (19) the impact of
the global COVID-19 pandemic, inflation, interest rate changes, the
ongoing conflict between Ukraine and Russia and in Israel and the
Gaza Strip, supply chain disruptions, fuel and energy prices and
logistical constraints on Polestar, Polestar’s projected results of
operations, financial performance or other financial and
operational metrics, or on any of the foregoing risks; (20)
Polestar’s ability to forecast demand for its vehicles; (21)
Polestar’s ability to raise additional funding; (22) Polestar’s
ability to successfully execute cost-cutting activities and
strategic efficiency initiatives; (and (23) other risks and
uncertainties set forth in the sections entitled “Risk Factors” and
“Cautionary Note Regarding Forward-Looking Statements” in
Polestar’s Form 20-F, and other documents filed, or to be filed,
with the SEC by Polestar. There may be additional risks that
Polestar presently does not know or that Polestar currently
believes are immaterial that could also cause actual results to
differ from those contained in the forward-looking statements.
Nothing in this Press Release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Polestar assumes no
obligation to update these forward-looking statements, even if new
information becomes available in the future, except as may be
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108523637/en/
Bojana Flint Head of Investor Relations
bojana.flint@polestar.com Theo Kjellberg Head of Corporate PR
theo.kjellberg@polestar.com Tanya Ridd Global Head of
Communications & PR tanya.ridd@polestar.com
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