Polestar aims to be ‘EV startup that delivers’ on target, CEO says

Polestar CEO Thomas Ingenlath joins Yahoo Finance Live to discuss company earnings, rising competition in the EV space, deliveries and production, and the forthcoming Polestar 3 and Polestar 4 models.

Video transcript

- Tesla's not so masterful master plan, perhaps, one of our top stories today. But the issue of growing competition in that space is still front and center for investors.

That brings us to Volvo offshoot Polestar. It seems to be coming into its own, as the company out with its fourth quarter results and its first fiscal year since going public. But rising competition does mean the fight among EV makers for everything from rare earth minerals to charging networks is growing.

Joining us with more is Thomas Ingenlath, Polestar CEO. Along with us also is Yahoo Finance's Pras Subramanian, who covers autos for us, of course. Thomas, it's great to see you. Thank you for being here.

Polestar did manage to do something relatively unique among the automakers, especially the EV automakers this last quarter. You exceeded your delivery estimates from analysts. How did you guys manage to do that? What levers did you push on to get those deliveries out?

THOMAS INGENLATH: Yeah, hi. Good morning. Yeah, we managed, indeed, to have a fourth quarter with 21,000 deliveries, making this 50,000 goal for '22, over exceeding it with 51,500 cars.

Well, we had a very, very strong production run in the second half of '22, which then left it up to our countries to deliver these cars right to the last day in '22 in order to get really all the produced cars out. And you can imagine we had a very, very happy Christmas party, knowing that we are in the run for delivering and really making that distinction, really being the EV startup that delivers on the targets and fulfills what we promised to do.

PRAS SUBRAMANIAN: Hey, Tom, it's Pras here. So strong quarter, strong year for Polestar. Looking ahead to next year, you guys are projecting 80,000 units in production or deliveries for next year, a 60% jump from this year. How are you guys going to achieve that? Are there concerns about materials and things like that?

THOMAS INGENLATH: This 80,000 target for 2023, we put it out, I would say, with the thought that yes, this is doable, even though we know that 2023 will still be a year where logistics and supply chain is not as optimum as it used to be years ago. We learn to manage with these things. We, of course, acknowledge as well the state the world is in. Ukraine war is still certainly a concern.

Nevertheless, 80,000 we feel is a very realistic target for this year. It is actually a year where the 80,000, mainly the big body of it is brought by the Polestar 2. We have a great upgrade of this car, the tech, with new battery and engines really making this an even more desirable product.

So 2023, still a year where we are operating as a one-model company when it comes to deliveries only in the fourth quarter, then really first volumes of Polestar 3 kicking in. But it is a transition year. We will, by the end of the year, have a product portfolio that then has a range of three products, not only Polestar 3, but as well the Polestar 4 being there joining and being launched this year.

- What factors do you believe will be most significant to continuing to shrink the operating loss?

THOMAS INGENLATH: Well, clearly we established now a commercial system with 27 markets up and running, 150 about [? Polestar ?] spaces out there. And, of course, this system is built not just for one car. It is built to actually work and operate with a model range of three cars. 2024, the number of cars that we produce and deliver to customers will do another big step. And, of course, using the system with delivering and selling many, many more cars will increase the efficiency and reduce dramatically the operating loss.

PRAS SUBRAMANIAN: Hey, Thomas, you mentioned the Polestar 3 and Polestar 4 coming up. How are those launches happening right now in terms of how are they developing? And what's been customer reaction so far to those two new models?

THOMAS INGENLATH: Well, Polestar 3 we showed in Copenhagen. And I guess you saw it. I think the reaction is very positive. You actually see it here in the background. And Polestar 4 will be a nice surprise that we will show very, very soon as well.

It is for us not now a concern about launching and bringing these cars into production. Our way asset-lite model that we are using, where we, indeed, work with the factories and the manufacturing teams that are established within Volvo and Geely gives us that kind of comfort about, yeah, not ending up in production hell.

This is really our task now, to shift the company from a one-model company to a three-model line-up in terms of making sure that the customer satisfaction stays high, that we actually have that premium experience when customers get a hand on this new Polestar. So that's, of course, a shift of the company, which we very carefully now monitor in '23.

- And, Thomas, now and in the future, talk to me a little bit about sourcing of the materials you need. Again, to hark back to Tesla, this was something that Tesla zeroed in on, was the sourcing of heavy metals, in particular from China, but from other places. They're difficult to get. What are your thoughts on that? And is there a future for the EV industry beyond the reliance on those types of materials?

THOMAS INGENLATH: Yeah, OK, we are part of a bigger group. The sourcing we do not do in isolation. We do that with a fairly big group. That, of course, gives us certain leverage. We have contracts. We have spread out the risk of several partners.

And, indeed, innovation and technology with battery technology is absolutely evolving. And we see new stuff coming, new changes coming. On the other hand, Tesla, thank God, express it as well. It is, of course, with rising demand, as well as the fact that there are more sources being opened. And it's not like these materials don't exist. I think that with the car industry going into electrification, it's just simply a very interesting market for other players to come in and to ramp up the mining.

- Yeah, most definitely. We will be watching that closely. We'll be watching you closely. Congrats on the quarter. The shares up 2% right now in US trading. Thomas Ingenlath, Polestar CEO, and Yahoo Finance's Pras Subramanian, thanks very much.