Back in July, electric vehicle maker Polestar (PSNY) made a bold promise.
The Gothenburg, Sweden-based company reported that it delivered 21,200 cars during the first six months of 2022, more than double the year-earlier figure.
Delivering the Goods
The automaker also said it delivered vehicles to Hertz (HTZZ) through a $3 billion deal under which the rental car company will buy 65,000 EVs during the next five years.
And then Polestar, which began trading on the Nasdaq on June 24, affirmed its 2022 target of delivering 50,000 cars, more than four times the year-earlier figure.
So now, after all these months, how is Polestar feeling, about that 50,000 figure?
Well, pretty good actually.
The company said on Oct. 7 that it had delivered about 9,215 vehicles in the third quarter of 2022, bringing the total year-to-date to roughly 30,400 cars for the first nine months of 2022, up 100% year-on-year.
‘We Needed to Catch Up…’
Polestar said that a recent ramp up in production following Covid-19 disruptions in China earlier this year “resulted in significantly higher production rates” and the company expects to meet its 50,000 global volume target for 2022 by delivering the remaining vehicles in the fourth quarter.
“We needed to catch up on production after Covid-19 related setbacks in China and we have,” CEO Thomas Ingenlath said in a statement. “The majority of Polestar 2 cars set for delivery in Q4 are ready and making their way to our customers in 27 markets around the world, with the fourth quarter set to be our strongest on record yet. I am confident we will meet our target of 50,000 cars for this year.”
The announcement comes a day after Polestar said it had opened a new retail location in Bellevue, WA, which the company said was “an integral part of Polestar’s commitment to having a physical presence in all of America’s key electric vehicle markets.”
Washington is second to California for the largest population of electric vehicles, the company said. The location is part of Polestar’s plan to expand to 35 locations across North America by the end of the year.
Struggling to Stand Out?
The company is steering into a rather crowded field of electric vehicles. Telsa (TSLA) is, of course, the big kahuna of EVs, and most of the legacy car companies have announced plans to electrify their fleets, and they’ll be joined by a number of start-up companies.
Last month, Polestar said that its revenue nearly doubled in the first half of 2022, citing rising demand. The company’s operating loss widened in the first half as well, amid rising costs for auto parts and rapid expansion.
Polestar went public on June 24 through a merger with a special purpose acquisition company, or SPAC, Gores Guggheim (GGPI), that was backed by billionaire investor Alec Gores and investment bank Guggenheim Partners.
The company (PSNY) finished its first day of trading at $13 share. Shares are trading below $6 currently.
Redburn analyst Charles Coldicott initiated coverage of Polestar in September with a sell rating.
As competition in electric vehicles increases, Polestar may “struggle to stand out,” especially beyond its core European market, Coldicott said.
Soft pricing hints at limited demand and he expects volumes below guidance, the analyst added.
Deutsche Bank analyst Emmanuel Rosner was more optimistic.
In August the analyst initiated coverage of Polestar with a hold rating and $10 price target.
Polestar was established in 1996 by Volvo Cars’ partner Flash/Polestar Racing and acquired in 2015 by Volvo, which itself was acquired by Geely in 2010.
Rosner said that he believed Polestar’s key strength is its “intimate partnership” with Geely and Volvo, creating an asset-light business model, speeding time to market, reducing manufacturing and supply risk, and ultimately allowing the company to focus on design, expansion and brand building.
Unlike many other electric vehicle startups, Rosner said Polestar has already delivered more than 50,000 vehicles worldwide since its start of production last year.