Shares of Polestar Automotive (NASDAQ:PSNY) stock are up by more than 20% after the company reported its third-quarter earnings. Notably, revenue tallied in at $435.4 million, up more than 100% year-over-year compared to last year’s $219.9 million. On top of that, the electric vehicle (EV) company reported an operating loss of $196.4 million, an improvement from the operating loss of $292.9 million sustained a year ago.
During the quarter, Polestar managed to churn out a net profit of $299.4 million, equivalent to earnings per share of 14 cents. CNBC attributes this to an “accounting credit related to the revaluation of future share payouts” due to a lower share price when compared to the initial public offering (IPO) price.
Earlier this month, Polestar received $1.6 billion from major shareholders Volvo (OTCMKTS:VLVLY) and PSD Investments. Volvo will supply a principal amount of $800 million in the form of an 18-month term loan. The loan amount is “on par” with what PSD is providing. Polestar will be able to draw up $150 million every month from its agreement with Volvo, while the proceeds will be used for “general corporate purposes.” The proceeds are expected to fund company operations until the end of 2023.
PSNY Stock Soars After Polestar Reports Q3 Earnings
Today, Polestar has around 70,000 vehicles on the road. By the end of the year, the company expects to deliver 50,000 vehicles, which will provide revenue of about $2.4 billion. These two estimates were in line with previously provided guidance. As of September, Polestar has delivered 30,424 vehicles this year and expects Q4 to be a record quarter for deliveries.
Last month, the company unveiled the Polestar 3 and expects to release the Polestar 4 in 2023 and the Polestar 5 in 2024. By 2030, the company aims to complete the Polestar 0 project, which seeks to produce a climate-neutral car. The car will completely eliminate all greenhouse gas emissions, all the way from the raw materials stage to delivery.
Polestar estimates that the global battery electric vehicle (BEV) market will grow at a compound annual growth rate (CAGR) of 18% from 2021 to 2026. Polestar seeks to capitalize on this opportunity by expanding its presence in both existing and new markets. Last month, the Polestar 3 made its debut in Copenhagen, Denmark, as part of the company’s expansion plans.
Polestar has a natural advantage over competitors due to its relationship with Volvo and Chinese automaker Geely Automotive (OTCMKTS:GELYF). This combination of knowledge and expertise has made the company a formidable competitor in the EV market.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
