Electric vehicle (EV) stocks are up today as positive market momentum pushes the Nasdaq composite higher. While Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN) have pulled into the green, one of their peers has an actual growth catalyst to report. Polestar Automotive (NASDAQ:PSNY) started the day by announcing that it has reached a key production milestone. PSNY stock is up 20% on the news.
Specifically, the company has generated 100,000 Polestar 2s. This popular model has helped the Swedish automaker secure a share of the EV market. More compelling than PSNY stock’s rise today is the fact it has surged more than 87% in the past month. This has been spurred by a recent announcement that Polestar saw its first gross profit since making its trading debut.
Even with the month’s impressive gains, it still trades at less than $8 per share. This makes it a highly attractive bet for investors seeking EV market plays. Let’s take a closer look at why it may be one of the breakout EV stocks of 2023.
Why PSNY Stock Has Room to Grow
It’s an excellent time to be a part of Europe’s EV market. Recent data reveals it grew by 16% year-over-year (YOY) in the second quarter of 2022. Legacy automakers Mercedes Benz (OTCMKTS:MBGYY) and Volvo (OTCMKTS:VLVLY) have led the charge so far, but Polestar is making it clear it is coming for its larger rivals. PSNY stock has been volatile today, but investors shouldn’t lose sight of the bigger picture. The trendy startup is expanding rapidly and working hard to compete with Europe’s auto giants.
As Polestar noted in a statement it released today, it has taken only 2.5 years to reach 100,000 units of the Polestar 2. It achieved this feat while supply chain constraints threatened EV production on a global scale. Through it all, the company has continuously upgraded the vehicle, adding over-the-air (OTA) updates, an extended charging range and “eco climate function and battery preconditioning optimisation.” While innovating its EVs, Polestar has also expanded its reach to 27 countries. It clearly has no plans to slow down in the coming year.
InvestorPlace contributor Chris MacDonald recently made a bullish case for PSNY stock, breaking down why he believes it has significant growth potential. In his words:
“Compared to the same quarter last year, its sales were up by 105%, amounting to $4 million gross profit. Moreover, driven by rising sales in Q4 2022, Polestar estimates to generate $2.4 billion from the sale of its vehicles. This company is also set to release the Polestar 4 SUV, the Polestar 5 grand touring sedan and the Polestar 6 roadster in the years to come.”
As MacDonald also notes, Polestar had more good news to report recently. It began November by announcing a new funding package of $1.6 billion from stakeholders Volvo and Geely (OTCMKTS:GELYF). As CEO Thomas Ingenlath notes, this puts Polestar well on track to accomplish its goal of releasing three new EVs by 2026.
Today’s production news only serves to strengthen the bullish case for PSNY stock. Polestar is well-positioned to keep scaling production and meeting demand as markets prepare for a correction.