Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Global vehicle sales increased by more than 80% in Q2 2024 compared to Q1 2024.
- Revenue rose by nearly 70% to USD 575 million in Q2 2024.
- Polestar 3 production started in South Carolina, making it the first Polestar model manufactured on two continents.
- SG&A expenses increased by only 6% despite an 80% increase in volume, indicating effective cost management.
- Polestar secured up to USD 300 million in new external funding in mid-August 2024.
Negative Points
- Operating loss increased by USD 18 million to USD 242 million in Q2 2024.
- Revenue decreased by USD 118 million or 70% compared to Q2 2023 due to lower global volumes and higher discounts.
- Gross profit remained negative at USD 4 million, impacted by higher discounts on Polestar 2.
- R&D expenses decreased by USD 36 million or around 75%, indicating potential underinvestment in future innovation.
- The company received a deficiency notice from NASDAQ due to its stock trading below $1.
Q & A Highlights
Polestar Automotive Holding UK PLC (PSNY, Financial) Q2 2024 Earnings Call Highlights
Q: Are you able to provide some more detail on the sequential improvement in COGS per external units, identifying a 14% reduction?
A: We are working hard on cost reductions, particularly in raw material prices for batteries. We are also negotiating with Volvo and Geely to further reduce costs. (Per Ansgar, CEO)
Q: Was there any impairment or any releases that were exceptional in the second quarter versus the first quarter?
A: No, there were no exceptional impairments or releases in the second quarter. (Per Ansgar, CEO)
Q: Can you help us understand the non-cash operating adjustments and other parts of working capital in the second quarter? Is it just inventory responsible for the free cash improvement?
A: The main reason for our good operating cash flow is a significant reduction in inventory, especially in the second quarter, around USD300 million. (Per Ansgar, CEO)
Q: Are Polestar 3 and Polestar 4 sold out for 2024 in Europe and the US?
A: Polestar 4 will launch very late this year, so we haven't started deliveries yet. For Polestar 3, we have a large order book in both Europe and the US, and we expect it to grow as we ramp up test drives. (Per Ansgar, CEO)
Q: Can you give us a little color on how we should think about deliveries for the second half of this year and the impact on gross margins?
A: Expect volume growth in the third and fourth quarters, with Polestar 3 and Polestar 4 taking a larger share. Our ambition is to have a double-digit gross margin by the end of the year. (Per Ansgar, CEO)
Q: What are your current plans to increase the share value?
A: We aim to demonstrate business improvement through increased deliveries and sales of Polestar 3 and Polestar 4, and continued good feedback from customers. (Per Ansgar, CEO)
Q: How do you plan to expose the brand more, sell more cars, and keep the stock value going up?
A: We are expanding our geographical footprint, engaging in targeted marketing, and focusing on test drives to attract customers. We are also working closely with retail partners to improve sales efficiency. (Per Ansgar, CEO)
Q: Can you give a sense of how Polestar 4 sales are trending in China and the benefits of working with Geely?
A: Polestar 4 is well-received in China, and we are balancing volume and margins. Working with Geely has provided cost benefits and R&D support, and we are also planning production in South Korea for US and other markets. (Per Ansgar, CEO)
Q: How sustainable is the working capital strength against the ramp of two new models?
A: We are working closely with retail partners to speed up the sales process and reduce lead times. Production in the US and South Korea will also help lower working capital needs. (Per Ansgar, CEO)
Q: What measures are leadership taking to ensure compliance and reassure shareholders that the stock will not be delisted in the future?
A: We have resolved our reporting compliance deficiency and are focused on increasing our share price through improved business performance and increased deliveries. (Per Ansgar, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
