Polestar (PSNY) delays Polestar 3 production, cuts annual target amid record Q1 deliveries

EV maker Polestar (PSNY) hit another record in the first three months of 2023, delivering over 12,000 vehicles in Q1. Despite the strong start, Polestar says it will delay the onset of production of its electric SUV, the Polestar 3, as it finalizes software development. On top of this, the EV is cutting its annual production guidance for the year.

Polestar 3 electric SUV production delayed

Polestar continues growing its presence globally, with over 100,000 cars on the road across 27 markets.

Last month, Polestar said it was on track to hit its goal of delivering 80,000 vehicles this year. Despite delivering a record 12,076 models in the first three months of 2023, up 26%, Polestar announced in its first quarter earnings Thursday it now expects global volumes of 60,000 to 70,000, still representing 16% to 36% growth YOY from the 50,000 achieved in 2022.

Meanwhile, Polestar says it will delay the start of production for its first electric SUV, the Polestar 3, until the first quarter of 2024.

The company gave the following information as to why production is being pushed back:

Polestar was recently informed that additional time for final software development of the new all-electric platform shared by Volvo Cars is needed.

Volvo Cars also announced today it will be delaying EX90 production into the first half of 2024 for the same reasons. Polestar CEO Thomas Ingenlath added:

We are taking necessary steps to strengthen Polestar in the near-term. While production of Polestar 3 will now start in the first quarter of 2024, the successful launch of Polestar 4 last month means that we add two strong offers in the attractive electric SUV market in 2024. I am confident that we will deliver on our growth ambitions and path towards profitability.

Although the EV maker expected the Polestar 2 to make up the majority of deliveries this year, the Polestar 3 production delay is likely a factor in the lower annual guidance.

Polestar Q1 financial results and highlights

In the first quarter of 2023, Polestar’s top line grew 21% but still fell short of Wall St. expectations.

Polestar generated $546 million in revenue, slightly lower than Wall St. estimates of around $570 million. The revenue was driven by Polestar 2 sales expanding globally.

Gross profit increased by $25 million after Polestar raised prices to offset higher input and transportation costs. As a result, Polestar’s operating losses fell by $60 million, or 23%, amid cost-cutting measures and higher gross profits.

Altogether, Polestar posted a net loss of nearly $9 million, compared to a loss of $274.5 million in the first quarter of 2022.

Polestar ended the quarter with $884 million in cash and equivalents, down slightly from nearly $974 million at the end of the year.