Polestar Q3 loss narrows, expects hit from rising costs (updated)

Brilliance China Automotive Holdings

11/11/2022 13:27

(Updates pre-market share reaction)
    By Marie Mannes
       Nov 11 (Reuters) - Polestar  PSNY.O  on Friday posted a
smaller third-quarter operating loss as revenue more than
doubled and the company cut spending, but the electric vehicle
(EV) maker warned that higher raw material costs would start to
hurt later in the year.
    The Swedish carmaker, founded by China's Geely  0175.HK  and
Volvo Cars  VOLCARb.ST , posted an operating loss of $196.4
million, down from $292.9 million a year ago, while revenue rose
to $435.4 million from $212.9 million.
    Polestar, which listed on the Nasdaq exchange in June via a
merger with a special-purpose acquisition company (SPAC), said
rising costs for raw materials used to make its batteries had
not yet fully hit because of set contracts.
    Chief Financial Officer Johan Malmqvist told Reuters
Polestar would face higher costs in the fourth quarter, while
price increases for its cars this summer had been slow to kick
in.
    "The full extent of that will then... partly offset the raw
material costs," he said, adding that the carmaker expected to
raise prices further. 
    Malmqvist said because much of Polestar's cost base is in
China, unfavourable exchange rates hit the company in the third
quarter and will continue in the fourth.
    Supply chain bottlenecks, including a global semiconductor
shortage, have made it increasingly difficult for carmakers to
meet targets. 
    But Chief Executive Thomas Ingenlath said Polestar was on
track to deliver 50,000 cars in 2022.
    The company delivered 9,215 vehicles in the third quarter,
while deliveries for the first nine months of 2022 rose 100% to
about 30,400 cars. 
    Ingenlath said the remaining 20,000 cars needed to meet its
target have been produced. 
    "We are now in a fairly comfortable position of 'only'
having to deliver these cars and not worry anymore about the
production", the CEO said.
    U.S.-listed shares of Polestar rose 16% to $5.29 in
pre-market trade.
 (Reporting by Marie Mannes in Gdansk, additional reporting by
Akash Sriram in Bengaluru, editing by Nick Carey and Louise
Heavens)
 ((Marie.mannes@thomsonreuters.com))