© Reuters. FILE PHOTO: People look at a Polestar car during the Munich Auto Show, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Michaela Rehle
By Marie Mannes
(Reuters) -Polestar on Friday reported a smaller third-quarter operating loss as revenue more than doubled and the company cut spending, sending shares soaring 29% in early trading.
However, the electric vehicle (EV) maker warned that higher raw material costs would start to hurt later in the year.
The Swedish carmaker, founded by China’s Geely and Volvo Cars, posted an operating loss of $196.4 million, down from $292.9 million a year ago, while revenue rose to $435.4 million from $212.9 million.
Polestar, which listed on the Nasdaq exchange in June via a merger with a special-purpose acquisition company (SPAC), said rising costs for raw materials used to make its batteries had not yet fully hit because of set contracts.
Redburn analyst Charles Coldicott said that while the shares rose there was nothing in the conference call with analysts that supported this reaction.
Chief Financial Officer Johan Malmqvist told Reuters Polestar would face higher costs in the fourth quarter, while price increases for its cars this summer had been slow to kick in.
“The full extent of that will then… partly offset the raw material costs,” he said, adding that the carmaker expected to raise prices further.
Malmqvist said because much of Polestar’s cost base is in China, unfavourable exchange rates hit the company in the third quarter and will continue in the fourth.
Supply chain bottlenecks, including a global semiconductor shortage, have made it increasingly difficult for carmakers to meet targets.
But Chief Executive Thomas Ingenlath said Polestar was on track to deliver 50,000 cars in 2022.
The company delivered 9,215 vehicles in the third quarter, while deliveries for the first nine months of 2022 rose 100% to about 30,400 cars.
Ingenlath said the remaining 20,000 cars needed to meet its target have been produced.
“We are now in a fairly comfortable position of ‘only’ having to deliver these cars and not worry anymore about the production”, the CEO said.