A growing number of companies is producing EVs, but not all are comparably successful. You have the start-ups, and you have the more traditional car companies trying to catch up. Among the start-ups, Geely-daughter Polestar seems to be heading for success. Others, like Nio, are accumulating sales but also losses.
Polestar strengthened its financial position in Q4 as the Swedish EV maker enters an exciting year with two new electric vehicle launches. The company’s fourth-quarter earnings are a breath of fresh air compared to most upcoming EV makers, with narrowing losses and surging revenues.
Beating the goal
Until now, Polestar has only one model on the market, the Polestar 2, of which more than 100 000 units have already been produced. This year, we will see the introduction of the Polestar 3 SUV and, later, the Polestar 4, a more sporty coupe-like SUV.
Polestar released its fourth-quarter earnings and full-year 2022 earnings results on Thursday before market opening, highlighting a solid year-end with slimming losses and higher-than-expected sales. After beating its goal and delivering 51 491 cars (almost all Polestar 2) last year, the ‘Swedish’ EV brand reported revenue of $ 2,5 billion last year, up 84% from 2021 and exceeding Wall Street expectations of $ 2,4 billion.
Perhaps, more importantly, Polestar cut its losses in half last year with a net loss of $ 465 million, compared to over $1 billion in 2021. Polestar says a higher gross profit of $ 118,5 million was due to rising Polestar 2 sales and lower fixed manufacturing costs. In Q4, revenue swelled to $ 985,2 million on the back of Polestar’s first fully electric car. The company ended the year with nearly $ 1 billion in liquidity as it moved to expand its presence globally.
Exciting 2023
Polestar CEO Thomas Ingenlath expects the momentum to continue with an “exciting year” ahead in 2023, as he explained on the company’s earnings call. Polestar aims for 80 000 vehicle deliveries in 2023, an increase of some 60% from this past year. The company just launched a significant update to the 2024 Polestar 2 with a new high-tech front end, more powerful electric motors and batteries, and a switch to rear-wheel-drive for the basic versions.
Polestar has an advantage over other upcoming EV markers combining the “agility of a startup” and the “stability of established players”, as it can lean on companies like sister brand Volvo and mother company Geely. Rather than building costly new electric vehicle manufacturing plants like other startups, Polestar can also convert existing factories, such as the one opened by Volvo in Ridgeville, SC, where the Polestar 3 will be built.
The Polestar 3 is expected to play a key role in expanding the Polestar brand, with deliveries expected by the end of the year. In addition, Polestar is launching a more compact electric SUV coupe this year, the Polestar 4, poised to take on top EVs in the segment like the Tesla Model Y. Next year, Polestar will follow it up with an electric performance 4-door GT, the Polestar 5.
Polestar stock is up over 20% following its Q4 release after falling over 50% in the past 12 months as investors digest the news.

And what about competitor Nio?
After achieving record EV deliveries in the third quarter, leading Chinese EV maker Nio adjusted its guidance for Q4 due to an outbreak of the Omicron coronavirus and “certain supply chain constraints.” Rather than the previous guidance of 43 000 to 48 000 deliveries, Nio said it expected between 38 500 and 39 500.
But, overshooting its adjusted target, Nio achieved another record in Q4, delivering 40 052 EVs, up 60% from Q4 2021 and a 26.7% increase from the previous quarter. Nio says the increase was due to scaling production of its ET5 and ES7 models. The company stated on its earnings call that the Nio ET5 outperformed China’s most popular gas models, becoming the second-best-selling model in China this January among all mid-size sedans costing more than RMB 300 000.
An area of concern is Nio’s vehicle margins, which were 6,8% in the fourth quarter, significantly lower than the 20,9% achieved in Q4 2021. Nio noted several reasons for the drop, including “inventory provisions, accelerated depreciation on product facilities, and losses on purchase commitments.”
Overall, Nio posted a net loss of $ 839,8 million in the fourth quarter, up 169% from Q4 2021 and 40,8% higher than in the third quarter. Nio’s Q4 earnings aligned with some other Chinese EV makers. XPeng, for example, also missed delivery expectations after Covid lockdowns hampered their progress.

Comments
Ready to join the conversation?
You must be an active subscriber to leave a comment.
Subscribe Today