Zinger Key Points
- Polestar reports Q3 revenue down 10% Y/Y, with net loss of $323M; retail sales decline 8% Y/Y to 12,548 cars.
- 2025 outlook aims for 30-35% annual sales growth, positive EBITDA, and Polestar 5 launch in H2 2025.
Swedish EV maker Polestar Automotive Holding PSNY shares are trading lower on Thursday after the company reported preliminary third-quarter revenue, updated fourth-quarter outlook and business plan.
The company reported a revenue decline of 10% year-over-year to $550.7 million due to lower volume and market conditions. Retail sales stood at 12,548 cars, down 8% year-over-year Y/Y.
The company reported net loss of $323 million, with adjusted EBITDA loss of $180 million, a 28% improvement led by cost reductions.
The company ended the quarter with $501 million in cash and secured over $800 million in bank facilities in December.
Full-Year 2024 Outlook: The company now expects mid-teens revenue decline (vs. prior outlook of similar to that in 2023) and a negative gross margin similar to 2023.
Lower-than-expected Polestar 3 and 4 sales, inventory adjustments, and market discounting impacted fourth-quarter performance.
Last week, Polestar reported fourth-quarter retail sales growth of 5.3%, driven by strong demand for Polestar 3 and 4 models, despite a 15% full-year decline.
2025 to 2027 Plan: The company aims for a 30-35% compound annual retail sales growth from 2025 to 2027, with positive adjusted EBITDA in 2025.
Commercial and operational momentum, along with improvements in margin, fixed costs, and working capital, are expected to drive positive free cash flow after investments by 2027.
Portfolio Update: The company says that strong product momentum continues, with Polestar 3 and 4 making up 56% of fourth-quarter of 2024 orders and the Polestar 5 launch set for the second half of 2025.
The Polestar 7, a premium compact SUV, will be produced in Europe, enhancing the company's global manufacturing footprint.
Retail expansion includes a 75% increase in dealership spaces by 2026, with sales starting in France this year.
Polestar is accelerating its shift to an active selling model, expanding retail partnerships and locations. Retail spaces will grow from 70 to 130 in Europe and from 36 to 57 in North America, while the direct-to-consumer online sales channel remains.
Also, Polestar will enter the French market in 2025, followed by expansion into Eastern Europe, Asia, and Latin America from 2026.
Michael Lohscheller, Polestar CEO, said, ”Both in terms of volumes and financials, we expect 2025 to be the strongest year in Polestar’s history.”
The company also works with Geely to secure new equity and debt funding to finance development and strategy implementation.
Investors can gain exposure to the stock via SPDR S&P Kensho Smart Mobility ETF HAIL.
Price Action: PSNY shares are down 13.5% at $1.055 at the last check Thursday.
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