Polestar widens Q1 losses
With 7,200 vehicles delivered in the first quarter, Polestar generated sales of 345.3 million dollars. At the start of 2023 – back then with the Polestar 2 as the only model – the figure was USD 543.4 million, although this figure has since been adjusted (more on this in a moment). Instead of a small gross profit, the balance sheet for Q1 2024 shows a gross loss of 30.8 million US dollars. If you deduct the (fairly constant) “selling, general and administrative expenses” and research and development expenses from this and add other operating income, the operating loss amounts to USD 231.7 million. A year ago it was “only” 219.9 million dollars.
Polestar explains the 36 per cent or 198.1 million dollar drop in turnover with lower global vehicle sales, higher discounts as a result of inventory management measures and “complexities in connection with revenue recognition for car sales to Chinese joint ventures”. The Swedish company can credit the reduced selling and administrative expenses as a success, as “active cost management measures offset the costs of promotional activities related to commercial campaigns and events for the global launch of Polestar 3 and Polestar 4”. However, the “active cost management measures” also include the massive job cuts in 2023.
What seems worrying in this phase of falling deliveries: Polestar has invested almost 24 million dollars less in research and development. However, the company emphasises that it is “continuing to invest in future vehicles and technologies”. The lower development expenditure is said to be a result of higher capitalisation and also write-downs on the Polestar 2 IPs in stock.
Polestar is currently in a difficult situation: demand for the brand’s high-priced electric cars has not developed as expected (despite regular updates for the Polestar 2). As a result, the brand has produced expensive stocks that can now only be reduced with discounts. And promising models such as the Polestar 3 have been delayed for a long time.
There are also internal management problems: deficiencies have been identified in previous balance sheets, which is why these had to be revised and corrected. Polestar only presented its financial figures for the full year 2023 (loss of 1.17 billion dollars) a few days ago. And the presentation of the Q1 figures at the beginning of July is also unusually late – this publication had also been postponed.
The publication of the Q1 business figures therefore now coincides with the announcement of deliveries in the second quarter. From April to June, Polestar delivered around 13,000 vehicles, around 80 per cent more than in Q1. However, with 20,200 vehicles in the first half of the year, the brand has not yet reached a growth trajectory for the year as a whole: over 56,000 vehicles were delivered in 2023.
In the coming months, Polestar is hoping for a further boost from the Polestar 3 and, in the long term, more from the Polestar 4, production of which is already underway in China. However, this would mean that the vehicle would be affected by the announced tariffs in the USA and the EU. From the second half of 2025, the Polestar 4 will also be built in South Korea – and can then be sold much more cheaply in the USA and Europe. Production of the Polestar 3 in South Carolina is scheduled to start at the end of the summer – the SUV has already been in production in China since February.
“We have strong momentum as we enter the second half of the year. Our two new SUV’s have received stellar reviews from the global media and first test drive slots were booked out and additional slots are filling up fast,” says Polestar CEO Thomas Ingenlath. “Our retail sales model shift is accelerating in Europe and we have strengthened our sales management team.”
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