Polestar: Waiting For Capital Raise

Core Viewpoint - The electric vehicle market is increasingly competitive, and Polestar Automotive Holding UK PLC has struggled significantly since going public in 2022, losing most of its value and requiring additional capital to stabilize its operations [1][5]. Financial Performance - Polestar's Q1 revenues were down 36% year over year, significantly below market expectations, partly due to delayed revenue recognition from vehicle sales to a joint venture in China [3]. - The company reported negative gross margins of nearly 9% for Q1, attributed to lower vehicle sales and increased discounting [3]. - Operating losses increased by approximately 5% year over year, totaling around $232 million for Q1, while free cash flow was negative at nearly$393 million [3]. - Despite a new $950 million loan to improve its balance sheet, Polestar ended Q1 with about$784 million in cash and a negative equity balance exceeding $1.54 billion [3][5]. Delivery and Production Challenges - Q2 deliveries totaled 13,000 vehicles, marking a decline of over 17.5$350 million to reach cash flow breakeven by late 2025, with potential dilution of shares anticipated [9]. - Analysts have mixed views on Polestar, with an average price target of $2.73, suggesting potential for significant upside from current levels, although the valuation remains at a historic low [11].