Polestar's Q2 financials feel like a rollercoaster of optimism and shortfalls

31 August 2023

Polestar rolled out its Q2 2023 financial figures with mixed sentiments. Sales grew, but maybe not as much as you'd expect from a brand that's practically shouting "future" from its rooftops.

First, let's talk numbers. A 16% year-on-year sales growth isn't too bad, hitting $685.2 million. But here's the kicker: Wall Street was hoping for a more flamboyant $756.2 million. In layman's terms, imagine throwing a party and promising 100 guests but only 85 show up. Sure, it's still a party, but the empty chairs are pretty glaring. Vehicle deliveries soared by a heartening 36% compared to the previous year, settling at 15,765 cars. But before we pop the champagne, let's peek behind the curtain.

Even with these strides in sales and deliveries, Polestar reported a gross loss of $0.8 million. It's a huge improvement from last year's $60.7 million during the same quarter. Blame it on those sneaky expenses like higher contract manufacturing costs, and supplier charges for semiconductors and batteries. It seems Polestar's swanky electric dreams are being held back, at least for now, by pesky real-world economics.

Then we arrive at the operating loss. It's not as bad as last year’s, which makes you wonder what "not as bad" means in this context. The loss improved to $274.4 million compared to last year's horrific $627.3 million. The reason? Some would argue it's because last year's numbers were inflated by a one-time listing expense of $372.3 million. A little like saying you're healthier because last year you had the flu.

CEO Thomas Ingenlath seems bullish about Polestar's prospects. He's gushing about record volume growth and the upcoming release of new models like the Polestar 4 and Polestar 3. Sure, new models are cool, but remember when Apple's iPhone 5C didn't exactly set the world on fire? Polestar remains confidently optimistic about delivering 60,000-70,000 vehicles in 2023. And let’s not forget their aim for a 4% gross margin, a figure we're all waiting to see happen given the current dismal -0.1%.

Polestar started as a racing team and it is keeping that spirit alive. Its stock performance is a rollercoaster, thrilling but kind of nauseating. Despite the cheery sales projections, the stock declined 28% year-to-date. Maybe investors are as skeptical as we are. But hey, if you like rollercoasters, you might enjoy this ride.

Is Polestar the Tesla killer it aspires to be? The jury’s still out on that one. Financial figures might be less than perfect, but at least Polestar is making vehicles people want to drive, and that’s not nothing. In a world where it seems like every other headline is about the climate crisis, an electric vehicle that doesn't compromise on luxury is a pretty exciting prospect. But excitement alone doesn't pay the bills.

Source