Investigation Overview - Levi & Korsinsky is investigating Polestar Automotive Holding UK PLC (PSNY) regarding potential securities fraud allegations [1] Company Focus - The investigation centers on Polestar Automotive Holding UK PLC (PSNY) [1] Legal Context - The investigation is related to potential securities fraud allegations [1]

Industry Overview - The electric vehicle (EV) startup sector has faced significant challenges over the past few years, with many companies experiencing substantial stock price declines due to large losses, high cash burn rates, and operational difficulties [1] Market Performance - Shareholders in the EV startup space have seen poor returns, as the stocks of many companies in this sector have plunged [1] Financial Health - Many EV startups are struggling with financial sustainability, as evidenced by their large losses and high cash burn rates [1] Operational Challenges - The inability to achieve operational efficiency and scale has been a major issue for several EV startups, contributing to their poor performance [1]

Investigation Initiation - Bronstein, Gewirtz & Grossman, LLC has initiated an investigation into allegations against Polestar Automotive Holding UK PLC (PSNY) [1] - Investors are encouraged to reach out regarding the investigation [1] Company Focus - The investigation targets Polestar Automotive Holding UK PLC (PSNY) [1] Legal Action - The investigation is being conducted by the law firm Bronstein, Gewirtz & Grossman, LLC [1]

Bronstein, Gewirtz & Grossman, LLC Initiates an Investigation into Allegations Against Polestar Automotive Holding UK PLC (PSNY) And Encourages Stockholders to Reach Out ...

Key Points Industry/Company * **Company**: Polestar * **Industry**: Electric Vehicle (EV) Manufacturing Core Views and Arguments * **Q2 2024 Results**: * **Vehicle Sales**: Increased by over 80% to 13,150 cars. * **Revenue**: Increased by nearly 70% to $575 million. * **Gross Result**: Negative at $4 million, driven by higher discounts on Polestar 2 and initial deliveries of Polestar 3. * **Operating Loss**: Increased by $18 million to $242 million. * **Cash Flow**: $669 million of cash and cash equivalents at the end of the period. * **Investing Cash Outflow**: $354 million, in line with plans. * **Financing Cash Inflow**: Net increase of $441 million. * **Outlook**: * **Volume Growth**: Expected in the second half of the year, particularly in the fourth quarter. * **Gross Margin**: Aim to achieve double-digit growth margin by the end of the year. * **Capital Needs**: No immediate need for additional capital, but looking forward to more equity injections. * **Recent Business Developments**: * **Polestar 3 Production**: Started in South Carolina, making it the first Polestar manufactured on two continents. * **Polestar 4 Deliveries**: Started in Europe and expected to ramp up in the U.S. * **Sales Model**: Focus on maximizing the value and efficiency of the existing distribution footprint and expanding into new markets. Other Important Points * **Cost Reductions**: * **COGS**: Reduced by 14% sequentially. * **Battery Prices**: Continuously reducing. * **Cost Management Actions**: Implemented in mid-2023 and early 2024. * **Working Capital**: * **Inventory Drawdown**: Released $300 million, mostly inventory. * **Trade Financing**: Largely undrawn and ready to deploy. * **Tariffs**: * **U.S. Tariffs**: 27.5% currently in place, with potential for an increase to above 102%. * **European Union Tariffs**: 10% currently in place, with potential for an increase to 19.3%. * **Mitigation Strategies**: Working with partners and suppliers to reduce costs and exploring options to avoid or defer tariffs. References * [doc id='1'] * [doc id='2'] * [doc id='3'] * [doc id='4'] * [doc id='5'] * [doc id='6']

Earnings Performance - Polestar reported Q3 revenue of $551 million, missing the analyst forecast of $634 million [2] - The company's net loss was $323 million, translating to a loss of $0.16 per share based on a 2.1 billion-share count [2] - Polestar sold 12,548 cars in Q3, an 8% year-over-year decline, with revenue from sales down 10% [3] - The net loss equates to a loss of $25,740 for every EV sold [3] Business Trends - Q3 marked an improvement in Polestar's business, as the revenue decline moderated to 10% compared to a 21% decline through the first three quarters of the fiscal year [4] Market Challenges - Polestar is facing challenges due to higher discounts in a competitive market and delays in sales ramp-up of new carlines, which are impacting sales and profitability [5] - The company updated its guidance, predicting a mid-teens percentage decline in revenue for 2024 and negative gross profit margins, compared to earlier expectations of flat sales and positive margins [6] Analyst Outlook - Most analysts covering Polestar believe the company will not achieve profitability until 2031, with concerns about its ability to survive until then [6]

Earnings Report and Expectations - Polestar Automotive Holding UK PLC (NASDAQ: PSNY) is scheduled to report its Q3 earnings on January 16th [2] - The upcoming earnings report is a key focus for investors and analysts [2] Analyst Background and Investment Approach - The analyst holds a Master of Science in Finance and focuses on long-term investments with a 5-10 year horizon [2] - The analyst prefers a portfolio mix of growth, value, and dividend-paying stocks, with a particular emphasis on value stocks [2] - The analyst occasionally engages in selling options as part of their investment strategy [2]

About the Company - Proactive is a financial news and online broadcast provider that delivers fast, accessible, and actionable business and finance news to a global investment audience [1] - The company operates in key finance and investing hubs worldwide, including London, New York, Toronto, Vancouver, Sydney, and Perth [2] - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [2] Industry Coverage - The company provides news and unique insights across various sectors, including biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Use of Technology - Proactive is a forward-looking and enthusiastic adopter of technology, equipping its human content creators with decades of expertise and experience [4] - The company occasionally uses automation and software tools, including generative AI, but all content is edited and authored by humans in line with best practices for content production and SEO [5]

Company Overview - Polestar Automotive is an electric vehicle (EV) maker backed by Geely's Volvo, producing high-end EVs including the Polestar 2, Polestar 3, and Polestar 4 [2] - The company went public via a SPAC merger in June 2022, with its stock opening at nearly $13 but now trading at about $1.30 per share [1] - Polestar plans to launch the Polestar 5 GT and Polestar 6 electric roadster in 2025 and 2026, respectively [2] Financial Performance - Polestar's revenue fell 3% to $2.38 billion in 2023, while its net loss more than doubled from $466 million to $1.17 billion [3] - The company received a delisting warning from Nasdaq after its stock dipped below $1 [3] - Analysts expect revenue to rise 15% to $2.75 billion in 2024 and surge 146% to $6.77 billion in 2025, with net losses narrowing to $1.03 billion in 2025 [4] Deliveries and Market Expansion - Polestar's deliveries surged 80% to 51,491 vehicles in 2022 but only increased 6% to 54,626 vehicles in 2023 [2] - Deliveries declined 23% year-over-year to 32,300 vehicles in the first nine months of 2024 due to supply-chain constraints and software issues [2] - The company plans to enter seven new markets in 2025 and aims to deliver about 155,000 vehicles that year [4] Valuation and Growth Potential - Polestar trades at 1.6 times this year's sales and less than one times next year's sales, with an enterprise value of $4.52 billion [5] - The company believes it can achieve a positive gross margin by Q4 2024 and reach cash flow breakeven by the end of 2025 [5] Challenges and Risks - Polestar faces significant net debt of $2.79 billion and ended its latest quarter with only $669 million in cash and equivalents [6] - The company's reliance on Chinese manufacturing exposes it to rising tariffs on Chinese-made EVs in the U.S. and Europe [6] - Expanding production in the U.S. and South Korea could drive up operating costs and compress gross margins due to pricing pressure in the EV market [6] Strategic Outlook - Polestar's stock is considered risky due to its ambitious goals, high debt, and competitive pressures in the luxury EV market [7] - The company has not yet proven its ability to scale up its business or differentiate itself from high-end competitors [7]

The EV maker has faced numerous challenges over the past year, and a new management team will look to right the ship. The stock of Polestar Automotive (PSNY -1.70%) has been on a tear recently, surging 108% since early August as it overhauled its management team and reestablished compliance with Nasdaq listing requirements. However, the company has struggled with production delays, slower demand, and other factors, and the stock remains 88% below its price since going public in 2022. With its new management ...