Kawundo.com
By Marie Mannes and Akash Sriram
STOCKHOLM (Reuters) -Polestar shares surged nearly 20% on Thursday after the electric vehicle maker reported a second-quarter gross profit margin that was much better than analysts had feared and said it had secured more funds.
The news came a day after the Swedish company replaced its CEO and after months of setbacks including reduced demand, new tariffs, and hold-up in its new car launches.
“They are improving their gross margins, and on a relative basis, they have much better margins than Rivian, Lucid or VinFast, so that’s encouraging,” Cantor Fitzgerald analyst Andres Sheppard told Reuters.
Polestar’s gross margin swung to negative 0.7% in the three-months to June, from 0.1% a year earlier. But Sheppard said that was way above analysts’ expectations for a negative 6-7%.
The company – like rivals – needs cash as it ramps up business and aims to become profitable and breakeven on cashflow in 2025, and has previously said it would need about $1.3 billion in external funding.
It suffered a blow earlier this year when one of its co-founders, Volvo Cars, said it would stop further funding. But majority shareholder and also co-founder, China’s Geely, has said it intends to continue to support the group.
In February, Polestar secured a $950 million loan from a bank syndicate, and on Thursday it announced a further $300 million loan from one of the banks, reaching its $1.3 billion goal.
Sheppard said it was positive the company had secured the additional capital.
“I think it helps to put some investors’ concerns at bay; it mitigates that near term capital needed,” he said.
“The business is nowhere near being fully funded, but it’s encouraging that they are moving to be,” he added.
Finance chief Per Ansgar reiterated on a call with analysts that Polestar would welcome an equity injection and that it was working on further reducing costs.
“We are looking to really reduce the base cost of all the car lines … there are quite a lot of opportunities,” he said.
Polestar has two new models out this year, the SUVs 3 and 4, which it started delivering to customers earlier in the year. Currently, most of its car sales are its original Polestar 2.
(Reporting by Marie Mannes in Stockholm and Akash Sriram in Bengaluru; Editing by David Goodman and Mark Potter)
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