A manufacturer of electric cars that is not Tesla has, for the first time this earnings season, reported a profit for the previous quarter.
This year, Polestar (PSNY), a Swedish company backed by Volvo and China’s Geely, announced its first gross profit as a public company.
Polestar completes SPAC merger and goes public
Polestar is publicly traded on the New York Stock Exchange. This transpired after Polestar successfully completed its SPAC merger earlier this year.
The following was stated by Polestar regarding the quarter:
Despite the fact that Polestar’s top line came in lower than anticipated, the company was still able to make a gross profit of $4 million thanks to a 105% increase in sales from the previous year to this year.
Because of the company’s efforts, the operating loss for the third quarter was reduced by one-third compared to the same period of time the previous year.
Polestar finished the first nine months of 2018 with revenue of $1.48 billion and a gross profit of $54 million. The company’s total sales for the year were $1.48 billion.
During that time period, Polestar distributed 30,424 automobiles to various locations across the globe. As a result, the corporation is well on its way to accomplishing its yearly objective of shipping 50,000 automobiles.
The leadership of the company predicts that “strong sales in the fourth quarter of 2022” will be the primary factor in the success of the business in 2022, which will result in revenues of $2.4 billion.
In addition, Polestar asserted that it has sufficient funds to last until the year 2023 thanks to a loan of $1.6 billion that was provided by its corporate parents, Volvo and Geely.
Polestar to Release Three New Vehicles in 2023-2026
According to Polestar, new versions of vehicles such as the Polestar 4 SUV, the Polestar 5 grand touring sedan, and the Polestar 6 roadster are scheduled to be released in the years 2023, 2024, and 2026, respectively.
Polestar had previously stated that the release of the Polestar 3 SUV, which will be manufactured at Volvo’s plant in South Carolina beginning in the middle of 2024, would take place in the fourth quarter of the year that followed.
The Chief Executive Officer of Polestar, Thomas Ingenlath, stated that production would be slowed down due to issues with the supply chain and a lack of parts, so it wasn’t all positive news.
Will there be a marked improvement in the following year?
Ingenlath responded to the reporters’ inquiries by saying, “No, we believe this will keep us busy again.”
In the beginning of this year, Polestar decreased its production forecast from 65,000 to 50,000 as a direct result of COVID-related shutdowns in China. Polestar automobiles are produced in a plant located in Chengdu, which is located in China.
Polestar’s Success Thanks to Volvo and Geely’s Resources
Despite this, shares of Polestar are increasing as a result of the success that the company is having.
Pure-play electric vehicle competitors such as Rivian (RIVN), Lucid (LCID), and Nio (NIO) have had a difficult time turning a profit, in contrast to Polestar’s “asset-light” business model, which has been successful thanks to the resources of its corporate parents, Volvo and Geely.