Polestar reports higher Q3 revenue, narrows its losses

Yahoo Finance’s Pras Subramanian joins the Live show to discuss the rise in stock for Polestar following third-quarter earnings.

Video Transcript

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BRIAN SOZZI: Polestar shares rising this morning after the company posted higher revenue and narrowed its operating losses in the third quarter. Yahoo! Finance Senior Correspondent Pras Subramanian is here with us. Pras, I can't say I'm surprised, I'm seeing these Polestar cars everywhere lately.

PRAS SUBRAMANIAN: Yeah, you know what, Sozz? Actually first net profit as a public company, too, right?

BRIAN SOZZI: Wow.

PRAS SUBRAMANIAN: So $0.14 a share here. The expectation was a $0.12 loss. So kind of surprising they actually pulled it out with a, you know, kind of a eked out a little profit here, which is more than we can say about other--

BRIAN SOZZI: Unlike Rivian.

PRAS SUBRAMANIAN: --EV companies. Right. So for the first two-- revenue wise, $435 million. That's up 105% compared to a year ago. To deliver 30-- around 30,000 cars. And they said they're gonna hit their goal of 50,000 cars for the year, so that's pretty good.

A bit of cold water here, though. Thomas Ingenlath, the CEO, said in a media call that, you know, talking about part shortages. Will the situation improve next year? No. We expect this again to be something that keeps us busy basically through 2023. So there's still a little bit of issue there with that-- with those, you know, part shortages.

They had a China-- lockdown in China. Their factory in Chengdu was shut down for a month. That also knocked their production forecast from 65K to 50K. So that happened. But hey, at least are gonna hit that 50K outlook. And also, they raised about $1.6 billion in new money to kind of keep them in good shape through next year.

BRAD SMITH: This car looks nice. This is--

BRIAN SOZZI: Nice.

BRAD SMITH: This is pretty sleek here. So how is Polestar stacking up against the other EV makers?

BRIAN SOZZI: You know, I think the big issue-- the big difference is that they have the backing of Geely and Volvo, they're corporate partners, right? So they have huge kind of parents, essentially, that can help them, A, build cars in China and in the States, right? They're gonna build that Polestar 3 brand in the US at Volvo's plant in, I think, South Carolina.

So they have those sort of huge kind of benefactors that are helping them out, floating them through this mess. Now, I shouldn't say mess but still floating them through the early stages of development.

But also, you know, talking about-- you know, you have people that can help you build cars with an asset light type of business model, where they can actually rely on their partners to help them build these cars. So that's more than you can say about for like a Rivian or Lucid, where they're going from scratch and we can see these growing pains are tremendous.

BRAD SMITH: For all of these companies, it comes down to a few things. Battery, but also the synergies production-wise. And you're just running through some of that production and what that's gonna look like. What type of synergies does Polestar have for the types of vehicles that it's bringing to market as well, within that production?

PRAS SUBRAMANIAN: So you know, they're leveraging a lot of Volvo, I think, for like from a design point of view, chassis point. They're sharing a number of chassis with Volvo cars. And then I think they use Geely for a lot of the technical know how, the motors and things like that. And I think Polestar does their own development, technical development, too, with their motors.

BRIAN SOZZI: It was cool. I sat in one of these. I reviewed one, Pras. And when you sit in there, all the technology turns on. It's totally seamless. It's a wild car. A really nice car. Good price, too.

PRAS SUBRAMANIAN: There's no-- there's no crank, you know? You just--

BRIAN SOZZI: Nothing.

PRAS SUBRAMANIAN: --sit inside it.

BRIAN SOZZI: Everything turned on.

PRAS SUBRAMANIAN: It knows you're in there and the car's on.

BRAD SMITH: Are we done with the crank? Are we done with sticking a key in and having to go through that?

BRIAN SOZZI: We're there, brad.

PRAS SUBRAMANIAN: Pretty much.

BRAD SMITH: We're there.

PRAS SUBRAMANIAN: Yeah.

BRAD SMITH: Wonderful.

BRIAN SOZZI: We're there, man.

PRAS SUBRAMANIAN: [INAUDIBLE]

BRAD SMITH: All right, that's only if I buy perhaps a '96 used car at this point. Pras, thanks so much for taking the time here with us today. Appreciate it.