Polestar posts $304 million loss amid delays, competition

Polestar Automotive Holding posted another operating loss in the second quarter as the electric vehicle maker struggled with software delays and intensifying competition. 

While revenue surged in the U.K. and Sweden, it declined in key markets including the U.S. and China during the three months through June, the EV maker said Thursday. Polestar, owned by Volvo Car and Chinese billionaire Li Shufu’s private investment company, posted a $304 million net loss. 

EV makers throughout Europe are struggling to gain market share amid intense competition from Tesla and Chinese manufacturers selling battery-powered vehicles at substantially lower prices.

Polestar’s results show ongoing woes at the company, which has only seen losses since its listing last year, pushing its stock down about 65 percent. Some shareholders are suing the architects of the listing, saying they were misled about the company’s value.

The company said the listing cost incurred in the second quarter of last year was $372 million. Excluding that one-time charge, Polestar's second quarter operating loss increased 8 percent to 19 million, CFO Johan Malmqvist said during a confernce call.

Polestar delivered 15,765 vehicles during the second quarter -- 36 percent more than the same period last year -- and kept in place its May forecast that it will deliver as many as 70,000 cars this year. The company is expected to ramp up volumes in the second half of the year, with Polestar 4 crossover production slated to begin in November.

Given the weakness in global markets, Polestar’s confirmation of its previous guidance on deliveries and a 4 percent gross margin for the full year is a “very strong signal,” CEO Thomas Ingenlath said in an interview. “It’s certainly not an environment where consumers are that easy to convince that they should buy a new car.”

Polestar reiterated that it will need to raise additional funds -- possibly by issuing new shares or bonds -- to support operations and ensure the company’s solvency. The company has repeatedly said there is “substantial doubt” about its ability to do so.

“We’ve said all along that through the actions we’ve taken, we are funded through the end of this year,” Malmqvist said. “We’re not guiding beyond that, aside from just mentioning that we’re working actively on it together with the two shareholders.”

He said that $1 billion of the $1.6 billion Polestar received from Volvo and Li’s private investment company to cover operation this year has been used.

Polestar also recently sold its factory in Chengdu, China, for $71 million to increase its liquidity, Malmqvist said.

Douglas A. Bolduc contributed