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1. Company Snapshot

1.a. Company Description

Polestar Automotive Holding UK PLC manufactures and sells premium electric vehicles.The company was founded in 2017 and is headquartered in Gothenburg, Sweden.

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1.b. Last Insights on PSNY

Polestar Automotive Holding UK PLC faces significant challenges, including a deteriorating balance sheet, substantial cash burn, and heavy reliance on debt. Despite a recent $200 million equity raise, the company's ability to raise additional capital is uncertain. Its Q2 2025 earnings call highlighted ongoing struggles, with a "going concern" warning indicating potential bankruptcy risks. To maintain its Nasdaq listing, Polestar plans a one-for-thirty reverse stock split. The company's revenue growth of 49% in the first nine months of 2025 was overshadowed by mounting losses.

1.c. Company Highlights

2. Polestar Delivers Strong Q1 2025 Results, Driven by Robust Sales and Margin Expansion

Polestar kicked off 2025 with a stellar first quarter, reporting an 84% year-over-year revenue surge, fueled by a 76% increase in retail sales. The company's gross margin improved significantly, climbing to 7% from a negative figure in the prior year, reflecting better cost management and a favorable product mix. However, the net loss for the quarter narrowed to $190 million, while adjusted EBITDA loss came in at $115 million, signaling progress in operational efficiency. On a per-share basis, the company reported an EPS of -$1.07, missing the consensus estimate of -$0.22, as higher operating costs partially offset top-line growth.

Publication Date: May -17

📋 Highlights
  • Strong Revenue Growth: Polestar achieved 84% revenue growth in Q1 2025, driven by successful sales of Polestar 3 and 4 models.
  • Gross Margin Improvement: Gross margin increased to 7%, a 15 percentage point improvement, reflecting better cost management and product mix.
  • Dealer Network Expansion: The company aims for a 75% growth in sales points by 2026, enhancing its commercial operations and customer reach.
  • Funding and Liquidity: Polestar secured $450 million in funding and renewed €480 million in facilities, ensuring financial stability for growth initiatives.
  • Operational Efficiency: Headcount reduction of 25% from 2023 to 2024, with further optimizations planned to improve cost efficiency and profitability.

Commercial Transformation and Dealership Expansion

Polestar's commercial strategy is undergoing a significant transformation, with a strong emphasis on expanding its dealership network. The company aims to grow its global sales points by 75% by 2026, a move that has already begun to yield positive results. CEO Thomas Lohscheller highlighted the shift from a direct distribution model to a dealership model, which has enhanced customer experience and contributed to the strong Q1 performance. This strategic pivot underscores Polestar's commitment to scaling its operations and improving market penetration.

Model Lineup and Cost Efficiency

The company's model lineup continues to be a key driver of growth, with the Polestar 3 and Polestar 4 leading the charge. Updates to the Polestar 2 and the upcoming launches of the Polestar 5 and Polestar 7 are expected to further bolster sales momentum. On the cost front, Polestar has made significant strides, with the cost of goods sold (COGS) per vehicle declining to $46,000 from $51,000, driven by battery cost relief and a better product mix. However, uncertainties around tariffs, particularly in Europe and the U.S., remain a headwind.

Valuation and Liquidity Position

From a valuation perspective, Polestar's stock currently trades at a P/S ratio of 1.23, reflecting the market's optimism about its growth prospects. However, the company's EV/EBITDA ratio of -16.22 highlights the challenges in achieving profitability. With $732 million in cash and a monthly cash burn of $100-120 million, Polestar has sufficient liquidity to execute its growth strategy. Management also emphasized plans to seek additional equity financing to strengthen its balance sheet further.

Outlook and Analyst Sentiment

Despite ongoing challenges, Polestar remains on track to deliver its growth strategy, with analysts forecasting a 46.2% revenue growth for 2026. The company's focus on commercial transformation, model lineup expansion, and cost efficiency positions it well to navigate the competitive EV landscape. While near-term profitability remains elusive, Polestar's strong top-line momentum and improving margins suggest a positive trajectory for investors willing to tolerate the risks associated with its high-growth, high-burn business model.

3. NewsRoom

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Polestar announces date for implementation of ADS ratio change from 1:1 to 1:30 ordinary shares

Dec -04

Source: businesswire.com

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Swedish EV maker Polestar announces one-for-thirty reverse stock split to maintain Nasdaq listing

Nov -14

Source: reuters.com

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Polestar Announces Plan to Implement ADS Ratio Change From 1:1 to 1:30 Ordinary Shares

Nov -14

Source: businesswire.com

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Why Polestar Automotive Stock Crashed Today

Nov -12

Source: fool.com

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Polestar plans reverse stock split to keep Nasdaq listing as losses mount

Nov -12

Source: reuters.com

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Polestar reports 49% revenue growth in the first nine months of 2025

Nov -12

Source: businesswire.com

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Polestar gets Nasdaq notice on potential delisting due to slumping stock

Oct -31

Source: reuters.com

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Tesla rival Polestar closes R&D sites in the UK and lays off 130 staff

Oct -30

Source: businessinsider.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.07%)

6. Segments

Vehicles

Expected Growth: 14.07%

Polestar's 14.07% growth is driven by increasing demand for electric vehicles, strategic partnerships with Volvo and Google, expansion into new markets, and a focus on sustainable and performance-driven products. Additionally, investments in research and development, as well as a strong online sales platform, contribute to the company's rapid growth.

Software and Performance Engineered Kits

Expected Growth: 10.5%

Polestar Automotive Holding UK PLC's 10.5% growth in Software and Performance Engineered Kits is driven by increasing demand for electric vehicles, growing adoption of advanced driver-assistance systems, and rising sales of high-performance vehicles. Additionally, Polestar's strategic partnerships, innovative product offerings, and expanding global presence contribute to its growth momentum.

Vehicle Leasing

Expected Growth: 22.18%

Polestar Automotive Holding UK PLC's 22.18% growth in vehicle leasing is driven by increasing demand for sustainable and premium electric vehicles, strategic partnerships with prominent dealerships, and a user-friendly online leasing platform. Additionally, government incentives for eco-friendly vehicles and a shift towards subscription-based services contribute to the segment's rapid expansion.

Carbon Credits

Expected Growth: 10.98%

Polestar Automotive Holding UK PLC's 10.98% growth in Carbon Credits is driven by increasing adoption of electric vehicles, stringent government regulations on emissions, and rising consumer awareness of environmental sustainability. Additionally, the company's strategic partnerships and investments in clean energy projects contribute to the growth.

Other

Expected Growth: 10.27%

Polestar Automotive Holding UK PLC's 10.27% growth is driven by increasing demand for electric vehicles, strategic partnerships with Volvo and Geely, expansion into new markets, and investments in research and development to enhance product offerings and competitiveness.

7. Detailed Products

Polestar 1

A high-performance hybrid coupe with 619 horsepower and 738 lb-ft of torque, featuring a unique design and advanced technology.

Polestar 2

A fully electric fastback with 402 horsepower and 486 lb-ft of torque, offering a range of up to 275 miles on a single charge.

Polestar 3

A fully electric SUV with 483 horsepower and 620 lb-ft of torque, featuring a spacious interior and advanced safety features.

Polestar Engineered

A range of high-performance upgrades and accessories for Volvo vehicles, including chassis, engine, and design enhancements.

Polestar Software Updates

Over-the-air software updates for Polestar vehicles, providing continuous improvement and feature enhancements.

8. Polestar Automotive Holding UK PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

Polestar Automotive Holding UK PLC faces moderate threat from substitutes, as customers have limited alternatives to electric vehicles, but the growing demand for sustainable transportation may lead to increased competition.

Bargaining Power Of Customers

Polestar Automotive Holding UK PLC has a relatively low bargaining power of customers, as the luxury electric vehicle market is niche and customers have limited negotiating power.

Bargaining Power Of Suppliers

Polestar Automotive Holding UK PLC faces moderate bargaining power of suppliers, as the company relies on a few key suppliers for critical components, but has some flexibility in sourcing.

Threat Of New Entrants

Polestar Automotive Holding UK PLC faces a high threat of new entrants, as the electric vehicle market is attractive and new companies are entering the market, increasing competition.

Intensity Of Rivalry

Polestar Automotive Holding UK PLC operates in a highly competitive market, with established players like Tesla, and new entrants, leading to intense rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 110.11%
Debt Cost 7.20%
Equity Weight -10.11%
Equity Cost 11.91%
WACC 6.72%
Leverage -1089.32%

11. Quality Control: Polestar Automotive Holding UK PLC passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.6$

Current Price

0.6$

Potential

-0.00%

Expected Cash-Flows