Q4 2023 Polestar Automotive Holding Uk PLC Earnings Call

Operator: Thanks for watching! Good day, and thank you for standing by. Welcome to the Polestar Business and Outlook Update conference call. At this time, all participants are in listen-only mode.

Okay.

Good day and thank you for standing by welcome to the post op business and outlook update conference call. At this time all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 1 on your telephone keypad. You will then hear an automated message advising that your hand is raised.

A question during the session you need to press star one on your telephone keypad, you wasn't yet and automatic message advising you'll have this race.

Operator: To withdraw a question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Bojana Flint.

Can we draw a question. Please press star one again.

Be advised that today's conference is being recorded.

And I'd like to hand, the conference over to your first speaker today Baganda Flynn. Please go ahead.

Hello, everyone I'm going to sleep in poster of Investor Relations. Thank you for joining post us business and outlook I'll take hold.

Bojana Flint: Hello everyone, I'm Bojana Flint from Polestar Investor Relations. Thank you for joining Polestar's Business and Outlook Update Call. Joining me today are Thomas Ingenlath, our CEO, and Per Ansgar, our CFO. Before handing over the call to Thomas, I would like to remind participants that some of our comments today will be considered forward-looking statements under U.S. federal securities laws and are subject to numerous risks and uncertainties in the course of post of actual results that differ materially from what we have been communicating. These forward-looking statements include, but are not limited to, statements regarding

Joining me today is Thomas and get them off I'll see you in pet on Scott All CSI.

Before handing over to call to Thomas.

I would like to remind participants that some of our comments today will be considered forward looking statements under U S Federal Securities laws.

And are subject to numerous risks and uncertainties that may cause bolsters actual results to differ materially from what we have communicated.

These forward looking statements include but are not limited to statements regarding <unk>.

The future financial performance of the company.

Bojana Flint: The future financial performance of the company. Production and Delivery Volumes, Near-term Outlook and Medium-term Targets, Fundraising and Funding Requirements, Macroeconomic and Industry Trends, Company Initiatives, and Future Events. Forward-looking statements made today are effective only as of today, and Polestar undertakes no obligation to update any of its forward-looking statements. For a discussion of some of the factors that could cause our actual results to differ, please review the risk factors contained in our SEC filing. As Polestar is adjusting the release date for the 2023 Preliminary Unaudited Financial and Operational Results to a later date in order to complete the first full year of compliance required by the Sarbanes-Oxley Act of 2002, we won't be in a position to discuss the matters pertaining to those results today. With that, I'd like to turn the call over to Thomas. Please go ahead. Yeah, thank you, Bojana. Good morning, everybody.

Production and delivery volumes near term outlook and medium term targets fundraising and funding requirements macroeconomic and industry trends company initiatives and other future events.

Forward looking statements made today are effective only as of today and posted undertakes no obligation to update any of its forward looking statements.

For a discussion of some of the factors that could cause our actual results to differ. Please review the risk factors contained in our SEC filings.

I suppose there is adjusting the release date for the 'twenty two 'twenty three preliminary unaudited financial and operational results to a later date in order to complete the first full year of compliance required by the Sarbanes Oxley Act of 2002.

We won't be in a position to discuss the matters pertaining to those results today.

With that I'd like to turn the call over to Thomas. Please go ahead.

Yes. Thank you.

Good morning, everybody good afternoon. Thank.

Thomas Ingenlath: Good afternoon. Thank you for joining us on our call today. And as Bojana mentioned, I'm sitting here together with Per Ansgar, who joined our company in January as the new CFO. Probably some of you have met before, but of course, this is our first analyst and investor call together. And yeah, I'm delighted to have you here with us, Per, and, of course, happy for you to have joined us. Please, could you do a brief introduction of yourself?

Thank you for joining our call today, and especially on the mentioned.

So can you get together with.

Scott who joined our company in January as the new CFO.

Yep.

Probably some of you have met before but of course. This is our first analyst and investor call together.

And yes, I'm delighted to have you here with US and of course happy for Ya joined US. Please if you could do a brief introduction of yourself, yes. Thank you very much two months and good morning, and good afternoon to everyone here and.

Per Ansgar: Yeah, thank you very much, Thomas. And good morning and good afternoon to everyone here. When Thomas approached me not so long ago, I was very happy and excited to get the question. I have been following Polestar for quite a long time, and I think Polestar is a very interesting and great brand. I definitely believe in Polestar's future. I have worked for close to 30 years in the automotive industry, for Volvo cars, Ford Motor Company, and also for Geely. So with that experience, I think I can add quite a lot to the Polestar business. And I've also seen Polestar from those angles quite a lot.

I went to mass approach me not so long time ago I was very happy and excited to get the question I have been following pollstar quite a long time and I think Paul Star is a very interesting and great brand and I definitely believe in the polls.

Cold starts you chair I had.

Close to 30 years.

In the automotive industry in Volvo cars Ford Motor Company and also in Chile.

With that experience I think I can add quite a lot to the upholstery business and I also see of course ports off on those and get quite a lot. So I am very well aware of.

Per Ansgar: So I am very well aware of what we are doing here and what the future looks like. I know quite a lot of the people on the team here, so I'm happy to work with Thomas and his team, and I will also look forward to interacting with you going forward. And with that, I will hand over to Thomas.

What we are doing here and what the future looks like.

I know quite a lot of the people in the team here is I'm happy to work with to amass and his team and I will also look forward to interacting with you going forward here.

Let me hand back over to Tomas.

Thomas Ingenlath: Yeah, thanks, Pam. Yesterday we made announcements that are very important for the future of Polestar. And I will start here today with the funding part. Now, as you know, since we presented the strengthened business plan in November, we have been very clear that we will require $1.3 billion in additional external funding to reach that cash flow break-even moment in 2025. These were the two really important anchor points of this announcement, and we always said that, yes, we are actually making good progress when it comes to this. External funding And of course, you can imagine, we are very happy now that yesterday we could announce a secured syndicate of leading global banks that come together for approximately 1 billion dollars for a free year loan facility. And that represents, of course, a very strong statement of confidence in Polestar and in our future. And I was just, the majority of the required funding secured.

Yeah. Thanks Pam.

Yesterday, we have made announcements that are very important for the future of paulista.

And I will start here today with funding path.

No since we presented.

In November the strengths of <unk> business spend we have been very clear that.

We will require a $1 $3 billion in additional external funding to reach that cash flow breakeven moment in 2025 seats to really main important anchor points of this announcement and we always said that.

Yes, we are actually making good progress when it comes to this.

External funding.

And of course, you can imagine very happy now that yesterday, we could allowance.

Secured.

Syndicate of leading global banks that comes together to approximately 1 billion.

All of Us for free you create a loan facility.

And that represents are of course, very strong statement of confidence and pulse and then our future.

Now was this maggiore.

A majority of the required funding secured we will now focus on delivering on the business plan, including the cash flow breakeven.

Thomas Ingenlath: We will now focus on delivering on the business plan, including the cash flow breakeven and, second important part, the high teens cross margins in 2025. Alongside the funding, we set out other key actions within the plan, and I want to update you on our progress on that. We will benefit from a richer product mix, obviously, with the two SUVs coming in with high margins. And Polestar 4 sales are accelerating around the world. Polestar 3 is now in production in Chengdu.

The second important part of the high teens gross margins.

In 2025.

Alongside the funding we set out the key actions within the plan and I want to update you on our progress on those.

We will benefit from a richer product mix, obviously with the two suvs coming in with high margins.

And post a four says accelerating around the world both for free.

In production in Chengdu.

And on both coasts, we will of.

Thomas Ingenlath: And on both cars, we will offer greater personalization for the customers, increased packages, and options. And with that, of course, that will lead, as well, to higher margins in this premium luxury segment. It doesn't stop here.

Greater personalization.

Other customers.

Increased packaging options.

And with that of course that will lead us to higher margins is premium luxury segment.

It doesn't stop here.

Thomas Ingenlath: We have the Polestar 5 that will be in production next year, and the prototype manufacturing is accelerating over the course of 2024, leading to the and others. Thank you.

Have to post a five that will be in production next year.

And the prototype manufacturing is accelerating over the course of 2024, leading to the <unk>.

Start of production in 'twenty five.

The expansion of our manufacturing footprint is on track.

Thomas Ingenlath: The expansion of our manufacturing footprint is on track. We have hit important production milestones for both Polestar 3 in South Carolina, US, and for Polestar 4, in Busan, South Korea. Both developments are, of course, very important steps for us to create that more diversified and de-risked manufacturing footprint, which will, on the one hand, improve profitability in some of our core markets, such as the US, but, as I said, de-risk our company, Polestar.

We have hit important protection milestones for both our free and South Carolina U S and for the past four and.

In Pusan South Korea.

Both developments they of course very important step for us to create a more diversified and derisked manufacturing footprint.

On one hand improve profitability and some of our core markets such as the U S. But.

As well as I said derisked.

Our company Postop.

Marketing distribution, we're making good progress.

We.

Half advancing efforts.

Optimizing our sales footprint.

Thomas Ingenlath: Marketing, distribution, we're making good progress. We have made significant efforts in optimizing our sales footprint to improve profitability as we scale, of course, now with the cars in our portfolio, scaling the business now significantly. This work is led by Christian Elverfors, who is our new head of sales. He joined us well earlier this year, together with Per, and he has already made lots of progress in a very short time, for example in Europe, where we are shifting some countries from a direct to an importer model, and in the US, where we are transitioning towards a wholesale model. Cost Management Cost remains a priority, and our efforts are delivering results. In the summer of last year, we announced our first round of cost optimization and a 10% headcount reduction.

To improve the profitability as we scale of course, our costs and our portfolio scaling the business significantly.

This work has led by Kristin Force, who is our new head of sales joined US earlier this year together with the payer.

And he has made already in Sperry short time lots of progress for example in Europe, where we are shifting some countries from a direct to an import model.

In the U S, where we are transitioning towards.

The wholesale model.

Cost management.

Of course remains a priority and our efforts are.

Delivering results.

And summer last year, we announced our first round of Optum.

Optimization, and 10% head count reduction.

And now ill pass driving the work here.

Even further and we recently announced an additional 15% head count reduction.

And of course pass all of US are focused on the Capex working capital inventory management.

Thomas Ingenlath: And now Pär is driving the work here even further, and we recently announced an additional 15% headcount reduction. And, of course, Payasal is focused on CAPEX, Working Capital Inventory Management, all in order to become leaner and more efficient as we continue to grow.

All in order to become leaner and more efficient as we continue to grow.

Now before we move to the outlook, let me say a couple of words about last week's announcement regarding the future ownership structure.

First foremost of course very pleased to have Julie Sweden, now as a major shareholder.

It's.

A more independent stronger postop the position we're in now within Mis, having Julia in the ecosystem.

Thomas Ingenlath: Now, before we move to the outlook, let me say a couple of words about last week's announcement regarding the future ownership structure. First and foremost, of course, very pleased to have Geely Sweden now as a major shareholder. A more independent, a stronger Polestar, the position we are in now, with Geely in the ecosystem.

S. Steely as stated we will have.

Of course stronger technological collaboration that has developed with over the course of.

Our product development very naturally over the last year.

But they also confirmed of course, the ongoing financial and operational commitment to pause, including future fund raising activities.

We welcome new shareholders, both institutional and retail.

And of course, we may.

Thomas Ingenlath: And as Geely has stated, we will have... Of course, stronger technological collaboration that has developed very naturally over the course of our product development very naturally over the last year. But they also confirmed, of course, the ongoing financial and operation commitment to Polestar, including future fundraising activities. We welcome new shareholders, both institutional and retail, and, of course, we maintain our great relationships with Volvo Cars. All the cars will retain an 18% stake in Polestar, and, on top of that, they have extended the shareholder loan by 18 months to the end of 2028, which is, of course, a clear sign of their continued trust and belief in our future. So now I hand over again to Peer to give an update on the 24-hour.

Maintain our great relationships with sulfur costs overall.

<unk> will retain 18% stake postop.

And.

On top of that they have extended the shareholder loan by 18 months to the end of 2028, which is of course, a clear sign of the continued.

We believe in our future.

So let me hand over now again back to Pat to give.

Update on the 24 outlook.

Yes. Thank you.

And as you heard the two months' described a lot on our production and ramp up towards the three year old stuff for we have started production of a poster three in China ports of four has also started production and we are delivering that to our Chinese market of course, now with lead times and logistics and also expanding to different markets.

Third we will see the global deliveries of those star caused to commence.

In the summer here and obviously right now we are fully focused on doing the final investment for those cars building up the production capacity and also launching activities to secure strong sales in the second half of the year.

Per Ansgar: Yeah, thank you, Thomas. And as you heard, Thomas described a lot about our production and ramp up of Polestar 3 and Polestar 4. We have started production of Polestar 3 in China. Polestar 4 has also started production, and we are delivering that to our Chinese market. Of course, now with lead times and logistics and also expanding to different markets around the world, we will see global deliveries of those cars commence in the summer here. And obviously, right now, we are fully focused on doing the final investment for those cars, building up the production capacity, and also launching activities to secure strong sales in the second half of the year. Of course, now you understand that this year there will be basically two different characters.

Of course now you understand that this year will be basically two different.

Telerik tests, the first half of the year.

Predominantly based on posted Tuesday.

The second half of the year, we will be completely different with the actions we have taken both on the cost side, but of course much more importantly, so on the deliveries of the two high margin Suvs. This combination will give a volume momentum and drive higher margins into the second half of the year.

And as we get Guy did yesterday now released by the end of this year, we expect the volume.

Growth that supports the 10 to 25 targets on the volumes and you will see expected double digit gross margin.

In the later part of this year with that let me hand back to two months for concluding remarks, and then we can go on to your questions.

Yes, Thanks Pam.

So post the three production has started preparations in the U S plant.

Per Ansgar: The first half of the year will predominantly be based on Polestar 2 sales, while the second half of the year will be completely different with the actions we have taken, both on the cost side but, of course, much more importantly so on the deliveries of the two high-margin SUVs. This combination will give volume momentum and drive higher margins into the second half of the year. And as we guided yesterday in our release, by the end of this year, we expect volume growth that supports the 2025 targets on volumes, and we also expect a double-digit gross margin in the latter part of this year. With that, I will hand over to Thomas for his concluding remarks, and then we can go on to your questions. Yeah, thanks, Pam.

<unk> manufacturing footprint in full swing.

Post the fourth sales picking up rapidly customers are falling in love with specific <unk>.

And plus the five kind of prototype series are being built this year and that purpose built factory dedicated to this spot aluminum bonded technology.

We have secured funding.

Yesterday and free cost and production.

So, we're making really major progress this year towards cash flow breakeven in 'twenty five.

Our model lineup possess.

Positions pulse.

The performance car brand in the electric H.

And with the news of yesterday.

We look.

Great great confidence into the future of our company.

So is that kind of.

But to the operator for the Q&A session.

Thank you so much.

As a reminder, if you wish to ask a question. Please press star one on your telephone keypad and makes my name to be announced do we draw a question. Please press star one again listen Bob will compile that can narrow studies will take a few moments.

Thomas Ingenlath: So, Polestar 3 production has started, preparations in the U.S. plant, the second manufacturing footprint are in full swing, Polestar 4 sales are picking up rapidly, customers are falling in love with Polestar 4, and Polestar 5 final prototype series are being built this year in that purpose-built factory dedicated to this sports car aluminum bonded technology.

And now we're going to take the first question and it comes from the line of Tobias <unk> from Redburn Atlantic. Your line is open. Please ask your question.

Thomas Patton Liana good afternoon, and thank you for taking my questions.

Pages 87 through 19 wanted facilities agreement disclosed on form 6K yesterday outlined the covenants on the new debt.

Given volume declined sequentially and <unk> 23, despite having the full effect of pulse start to refresh and that retail sales in January appear to be weaker year on year, what gives you confidence.

Thomas Ingenlath: We have secured funding, we announced yesterday, and three cars are in production. So we're making really major progress this year. Two words: cash flow breaks even in 2021.

Since that Youre able to meet minimum revenue threshold of $5 $4 billion. This year. What's your estimate is equivalent to retail sales of about 100000 units.

Operator: Our model lineup positions Polestar as the performance car brand in the electric age. And with the news of yesterday, we look with great, great confidence into the future of our company. So with that, I hand over to the operator for the Q&A. Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again.

Oh.

Yes. This is Pat I can take that question, obviously, when we when we close the club loan area have been very happy to get we are of course aware of the covenants and the covenants are built on the business plan that we have.

Presented late last year that business plan took into account.

More difficult market. So this is completely in line with our expectations. So we don't see a problem from that perspective.

Okay understood.

On a pro forma basis.

Assuming all outstanding credit facilities are drawn.

The pulse stocking on board about $1 billion, new debt without breaching the total indebtedness covenant.

Operator: Please stand by, we'll compile the Q&A roll study. This will take a few moments. And now we're going to take our first question. And it comes from the line of Tobias Beith from Redburn Atlantic. Your line is open.

Is the plan there to raise incremental capital via equity and use the headroom for refinancing and reciting the short term working capital facilities outstanding.

Yeah, as we said before when we presented our business plan late last year, we talked about getting more money into the company a combination of it.

Tobias Beith: Please ask your question. Thomas, Per, Bojana, good afternoon, and thank you for taking my questions. Pages 87 through 91 of the Facilities Agreement, disclosed on Form 6K yesterday, outline the covenants on the new debt. Given volume declined sequentially in 4Q23, despite having the full effect of the Polestar 2 refresh, and that retail sales in January appear to be weaker year-on-year, what gives you confidence that you're able to meet the minimum revenue threshold of $5.4 billion this year, which you estimate is equivalent to retail sales of about Yeah, this is Per.

Loans and equity now we have almost a billion of loans. Obviously, we are looking into more equity. If you ask me as a CFO would that be happy to add significantly more equity, yes, I would like to have that so we are preparing ourselves to find more equity as soon as we think it's the right time to do that.

Talk to you about the right time, I mean, obviously.

The order.

This came now is.

The debt financing now and us.

As progressing the company.

This year the.

Two suvs coming to the business really.

Using the other system that we have installed in the sales organization in all three countries.

We feel that that.

The year will be very important for polestar, two develop as a company to actually.

Per Ansgar: I can take that question. Obviously, when we closed the club down here, which we have been very happy to get, we are, of course, aware of the covenants, and the covenants are built on the business plan that we presented late last year. That business plan took into account the somewhat more difficult development market. So this is completely in line with our expectations. We don't see a problem from that perspective.

Proof points that we have been always making about the advantage of our supply model and that our company will.

The three models in our lineup.

<unk>.

Much better position to actually portrayed that successful business model and.

We are feeling much more confident that the equity round.

At that point in time, it will be very good.

Per Ansgar: Okay, understood. On a pro forma basis, assuming all outstanding credit facilities are drawn, I calculate that Polestar can take onboard about a billion dollars of new debt without breaching the total indebtedness covenant. Is the plan now to raise incremental capital via equity and use the headroom for refinancing and resizing the short-term working capital facilities outstanding? Yeah, as we said before, when we presented our business plan late last year, we talked about getting more money into the company through a combination of loans and equity. Now, we have almost a billion dollars in loans. Obviously, we are looking into more equity. If you asked me as a CFO, would I be happy to have significantly more equity?

Time to address this question.

Alright, Thanks, and just one last question.

How does pollstar think about branding.

I have a look in China for example.

Pulse thoughtful with what Julie but you can get the Ria.

This causes confusion.

Since it's not a bad thing it's.

Okay.

Principle that the.

The cotton industry.

So very familiar with we are sharing technology with Volvo, we're sharing technology with Chile.

Building our posts are free.

Technology that we share together was a <unk> 90.

The proof point of US building, a very strong identity as a Scandinavian design brand with our very unique.

Technology features.

Obviously always very customer oriented technology that you can experience and the poster for as a highlight I mean really introducing.

Virtual real window with a much much better rearview through.

The Kmart view then through the <unk>.

Per Ansgar: Yes, I would like to have that. So we are preparing ourselves to fund more equity as soon as we think it's the right time to do that. Talk here, comments here about the right time. I mean, obviously, the order that this came now is... the debt financing now and us progressing the company. This year, the two SUVs are coming to the business really, using now the system that we have installed in the sales organization in all the 23 countries. Of course, we feel that that year will be very important for Polestar to develop as a company, to actually prove the points that we have always been making about the advantage of a S-supplied model, and that our company will, with the three models in our lineup, be in a much better position to actually portray that successful business model, and we are feeling much more confident that the equity round at that point in time will be a very good time to address this And just one last question.

Very limited view that through.

These are unique feature sets of course make the make the brand shine.

I'm certainly.

Much.

Driving the strong brand expression of each and our costs supporting that.

When you see how the poster for.

Science as a start and shows.

People are very very.

Pleased to say that vary.

Very good comments about how the car looks how how the comp puts together a very attractive.

Offered to the customers and certainly think that especially as opposed to four does a great job for all of our brands and positioning and offer.

Alright, I appreciate the answers thanks Bill.

Thank you.

Now well go and take our next question.

Just give us amendments.

And the next question comes from the line of Alex Potter from Piper Sandler. Your line is open. Please ask your question.

Perfect. Thanks very much.

So maybe the first question is on the head count reductions I'd be interested in hearing.

I guess, the the job functions that youre going to be reducing head count in what had these folks have been working on and what sacrifices operational sacrifices do you think you'll be making now.

Thomas Ingenlath: How does Polestar think about branding? If I take a look in China, for example, the new Polestar 4 is where Geely badging is at the rear. Do you think this causes confusion?

That they will no longer be with the company.

Little bit twofold answer here I mean big time, so is this.

Fairly general reduction in order to drive efficiencies a company that has been growing that process Pollstar I. Thank each and every company of course I mean, if you look into it you have this potential to drive efficiency said this is not an unknown.

Thomas Ingenlath: Since it's not a bad thing, it's a principle that the car industry is very familiar with. We are sharing technology with Volvo, we are sharing technology with Geely, and we are building our Polestar 3 on technology that we share together with the EX90. I think it is the proof point of us building a very strong identity as a Scandinavian design brand with our very unique technology features. Obviously, always very customer-oriented technology that you can experience. And the Polestar 4 as a highlight, I mean, really introducing the virtual rear window with a much, much better rear view through the camera view than through the very limited view that you have through the rear window. These are unique features that, of course, make the brand shine. I'm certainly...

Tool.

And.

Sat in this unfortunate this measurement is the organization, having said that and each and every individual having said that it is.

Not bad to once in a while actually.

Squeezes efficiencies.

Get this higher performance out of the company.

Having said that.

There are certain elements of the buildup phase was in poster which of course right.

Certain degree of completion and we are turning to us are different.

Iraq and Paulista and that is after building up all the tools and all the.

Tobias Beith: Thank you very much for driving the strong brand expression of each of our cars and when you see how the Polestar 4 shines as a star in shows where people are very, very pleased about, how do I say that? Very well, I have very good comments about how the car looks, and how the car puts together a very attractive offer to the customers. And I certainly think that Polestar 4 does a great job for our brand, positioning, and offer. Alright, I appreciate the answers. Thanks, all.

Systems, we are of course now going into the phase we are using them.

Of course.

The strengthening.

The strengthening of what it takes to to sell the costs to actually be out there in the market.

Drive.

Five profitable sales is.

What we concentrate on now.

And for example building up a digital.

System that that supports this.

As of course, rather in the completion phase.

And of course that you have probably a higher portion than the 15% of the.

Operator: Thank you. Now we're going to take our next question. Just give us a moment. And the next question comes from the line of Alex Potter from Piper Sandler.

The head count reduction that you can execute.

Okay that actually is a good segue into my next question you mentioned in your prepared remarks.

Focus on the sales channel.

Operator: Your line is open; please ask your question. Perfect. Thanks very much. So maybe the first question is on the headcount reductions. I'd be interested in hearing.

I think you mentioned something about going to a wholesale model in the United States can you elaborate a little bit.

Our go to market strategy is changing or growing.

Yes love to do that.

To the U S.

In the very beginning we took the decision to not go too tall for the 100% direct sales model as we had it in the rest of the world in the U S. Because we just simply.

Alexander Eugene Potter: I guess the job functions that you're going to be reducing headcount in, what had these folks been working on, and what sacrifices, operational sacrifices, do you think you'll be making now that they will no longer be with the company? A little bit of a two-fold answer here. I mean, big time, this is a fairly general reduction in order to drive efficiencies. A company that has been growing that fast as Polestar, I think even every company, of course, if you look into it, you have this potential to drive efficiencies. That is not an unknown tool.

That would hinder us to go faster market was all the lawsuits and whatever that would have been connected to <unk>.

Pushing that through so we indeed already had kind of a hybrid model working with.

Dealers that sell our costs in a more traditional wholesale way, but we implemented still and hold onto some direct says principles that we had here in Europe and we actually found that that is a very inefficient combination and in the case, where we have the dealers out there we've really.

Thomas Ingenlath: And as I said, and that's unfortunate, this measurement is for the organization. Having said that, and each and every individual who has said that, it is not bad to once in a while actually squeeze its efficiencies and get this higher performance out of the company. There are certain elements of the built-up phase within Polestar, which has, of course, reached a certain degree of completion, and we are turning towards a different era in Polestar, and that is after building up all the tools and all the systems. We are, of course, now going into the phase where we are using them. Of course, the strengthening of what it takes to sell the cars, to actually be out there in the market and drive profitable sales is what we concentrate on now. And, for example, building up a digital system that supports this is, of course, rather in the completion phase.

Embraced now.

We use that to the full benefit of that.

Wholesale model.

Really.

Don't try to make a mismatch, but two to go for this.

Very clear principles.

And the rest of the world, especially of course now.

Europe Bev.

Half our direct sales model, we see that the.

Fairly theoretical idea of the beginning needs.

The evolve and that evolution that we actually.

And Abel.

Certain degree of higher autonomy within the space.

Less central steering a bit more responsibility into the markets and to the individuals spaces just in order to drive performance.

And we are.

Very convinced that Christy.

Christiane.

Will.

Drive.

The assistant to a very successful business model for us So there's definitely a big big.

Plus to be to be gained.

Working on this side.

Okay excellent. Thank maybe one last one.

Thomas Ingenlath: And of course, there you probably have probably a higher portion than the 15% of the headcount reduction that you can. Okay, that actually is a good segue into my next question. You mentioned in your prepared remarks a focus on the sales channel. I think you mentioned something about going to a wholesale model in the United States. Can you elaborate a little bit on how your go-to market strategy is changing or growing? Yeah, I'd love to do that.

And maybe it's a slightly unfair question because both our board hasnt really been in the market for a very long yet, but I know that you had mentioned pollstar far where it's going to be a major tool.

Especially in China.

I'd say, it's being produced in China, So any of maybe the initial.

Reaction anything you can say about how pollstar for us being with you specifically in the Chinese market.

Yes. The question is a bit early because of course.

Thomas Ingenlath: To the U.S. In the very beginning, we took the decision not to go for the 100% direct sales model, as we had it in the rest of the world, in the US, because we just simply felt it would hinder us from going fast to market with all the lawsuits and whatever that would have been connected to pushing that through. So we already had kind of a hybrid model working with dealers that sell our cars in a more traditional wholesale way, but we still implemented and held on to some direct sales principles that we had here in Europe. And we actually found that that is a very inefficient combination.

It's at the moment in the phase, where we see how.

Journalists test drive.

Results.

Good feedback for us.

While for the sales of course this is still a bit too early to have a conclusion on that we have.

From the.

From the test drives from the feedback of the journalists alder.

Opinion.

Lead us there in China.

And I say surprising because this car.

It gets a lot a lot of credit for.

For being <unk>.

Actually.

Our performance call.

We shouldnt be surprised about because thats, what we are high performance car brand.

But obviously this was never before that much in the focus in China.

Thomas Ingenlath: And in the case where we have the dealers out there, we really embrace now that we use that to the full benefit of that wholesale model and really don't try to make a mishmash but to go for this very clear principle there. In the rest of the world, especially, of course, now here in Europe, where we have our direct sales model, we see that the fairly theoretical idea of the beginning, the evolution, the evolution that we actually enable a certain degree of higher autonomy within the space, less central steering, a bit more responsibility into the markets and into the individual spaces just in order to drive performance. And we are very convinced that Christian will drive.

And they actually see now.

Actually great attributes and the performance of this car.

And what we made out of this technology in terms of being a performance car I think it's a very very good starting point.

Why is that second element, which we.

Things will be very crucial as well, it's not quite as dominant yet and then as opposed to Oss that software in the car and its combination to the.

Technologies that we bring through the JV with major with a mobile phone company I think it's just very clear the mobile phone.

Yes.

The event just in front of Beijing Motor show in April.

Thomas Ingenlath: I think this will drive this into a very successful business model for us, so there's definitely a big, big, um, plus to be gained from working on this. Okay, excellent. Thanks. Maybe one last one.

Coming to launch so that element is actually going to be deployed only in the very near future. So I think then this smart device aspect of the poster for having this full integration of its own phone will be much more tangible and that experience is still to come so we definitely.

Thomas Ingenlath: Maybe it's a slightly unfair question because Polestar 4 hasn't really been in the market for very long yet, but I know that you mentioned Polestar 4 was going to be a major tool, especially in China, and obviously it's being produced in China. So any of maybe the initial reaction, anything you can say about how Polestar 4 is being received specifically in the Chinese market? Thanks. Yeah, the question is a bit early because, of course, the answer... It's at the moment in the face where we see how journalists' test drive results give us feedback for us, while for the sales, of course, this is still a bit too early to have a conclusion on that. We have, from the test drives, from the feedback of all the journalists, all the opinion leaders there in China.

We see this market now building up they have to do a lot of work in terms of building out the network. So the JV is very busy in la.

Launching the product launching the phone and of course investing in building into the.

Sales network of close on China, but first of all first reaction of Journal Center people, who drove the car very positive.

Great. Thanks, everyone.

Thank you.

Now we're going to take over next question.

Just give us amendments.

And the next question comes from the line of Brigade Dang from Deutsche Bank. Your line is open. Please ask your question.

Thomas Ingenlath: And I say that it's surprising because this car gets a lot of credit for being actually a performance car, which we shouldn't be surprised about because that's what we are, a performance car brand, but obviously, this was never before that much in the focus in China and that they actually see now the actual great attributes and the performance of this car. And what we have made out of this technology, in terms of being a performance car, I think it's a very, very good starting point. Why that second element, which we think will be very crucial as well?

Hi, Thanks, so much alright, and with your question.

I Wonder if you can specifically comment on the.

The order pattern or indeed, 19, Brian and I assume it's typically or no.

With that too.

Given that.

A large quantity of volume for this year.

How can we combat vehicle.

And what exactly is implied in the second half.

And then Andy can.

Comment on that.

Of that one.

Excuse me.

I didn't understand it and nobody in the room, which pattern. We just couldn't hear it probably needs in the quarterly phasing is that were you asking.

Sure just the demand environment for that vehicle and order trends so that so that vehicle.

Post two poster two alright, thank you.

Thomas Ingenlath: It's not quite as dominant yet. And that is the Polestar OS, the software index car, and its combination with the technology that we bring through the JV with Meiju, the mobile phone company. I think this is very, very clear; the mobile phone is at an event just in front of the Beijing Motor Show in April, coming to launch. So that element is actually going to be deployed only in the very near future.

Okay.

Well.

Plus it is good and we have obviously now this year full.

A full year of <unk>.

The upgraded posted two and what we see is that.

It's equally working on one hand, the long long range that we have.

<unk> with the rear wheel drive.

Very positive.

Scepter for that but at the same time and especially since we made this now a very competitive of our kind of like okay. Either you take the range.

Thomas Ingenlath: So I think then this smart device aspect of the Polestar 4 having this full integration of its own phone will be much more tangible, and that experience is still to come. So we definitely see this market now building up. But they have to do a lot of work in terms of building up the network.

Hum.

Longest in the Ria will all you go for a higher performance in the four wheel drive.

That's something that is.

Thomas Ingenlath: So the JV is very busy launching the product, launching the phone, and, of course, investing in and building the sales network of Polestar in China. But Polestar 4, the first reaction of journalists and people who drove the car, was very positive. Great. Thanks, everyone.

Alexander Eugene Potter: Thank you. Now we'll go and take our next question. Just give us a moment.

Operator: And the next question comes from Winnie Dong from Deutsche Bank. Your line is open; please ask your question. Hi, thanks so much for taking my question. I was wondering if you could specifically comment on the order pattern or the event environment that you're seeing specifically for postcard two for the year, given that, you know, a large quantity of volume for this year is going to be coming from that vehicle and Polestar 3 and 4 in the second half. So, I was wondering if you could maybe, yeah, basically comment on the demand environment for that one. Excuse me, we didn't understand here, nobody in the room, which pattern you were talking about. We just couldn't hear it properly.

The <unk> had to perform in 2023, so that gives us have caused some much.

Great a chance to to work with <unk> in a in a in a very favorable and good way. So we will see as we said a gross a volume in 2024, which is I think mmm.

Very nice differentiate or to a lot of us.

And of course that is due to the fact that my.

Mmm invest it and that the this product portfolio is coming alive, and three and four join and we can.

Enjoyed that kind of volume growth purely because we have now mmm.

The free Cos and in our toolbox.

Winnie Dong: Winnie, is it the quarterly phasing, is that what you're asking? So just the demand environment for that vehicle and auto trends for that vehicle. Polestar 2. Polestar 2, you're right.

I think it to add to that one I think it's also very interesting to see that when we know launch the new cars. The interests opposed us two orders the starts to pick up we saw when we launched phone stuff for air in Europe on our website and a coffee great dose and people were putting in order to <unk> more interested in the <unk>.

Thomas Ingenlath: Polestar 2, yes. Well, um... Polestar 2 is good, and we have now, obviously, now this year a full year of... the upgraded Polestar 2. And what we see is that, on the one hand, the long, long range that we... Chief with the rear wheel drive, very positive reception for that, but at the same time, and especially since we made this now a very competitive offer, kind of like, either you take the longest range in the rear wheel drive, or you go for a higher performance in the four-wheel drive, and that's something that is attracting great interest. But I would love to emphasize as well one thing, obviously, in 2023, our company, Polestar, was very dependent on that one car, and we were very, very interested in selling a very high number of Polestar 2, which, of course, in a difficult environment, and us being very careful about the margins, led us to a situation which was, of course, always a bit tricky volume-wise. That'll be totally different in 2024.

Test drives in order to picking up info. So we expect it posted to to benefit from the <unk>. Yeah. The cost of course <unk> more people see that post or is it a very nice brand.

Yeah.

Thank you very much for that and then my second question is on the gross margin the national guidance happening here, reaching in the double digits at the end of this year and an I T N.

And tell me 25, I guess first on the double digit towards the end of this year you know I <unk>.

Can be you know coming on of the higher margin vehicles is gonna help it that is any other drivers maybe on a call back or you can also explain to you that you know it helps you get there and it this year and into next year.

No that that's a good question obviously.

S U V <unk> into that than other courses like that is one of the main driver, but your server quite a lost dog with <unk>.

How the revenue how we package it costs in terms.

So options and pack does that does that will improve our revenue you're also working very hard on the product costs that will also support the other thing which is also very important going into our sales and marketing strategies. Like we we are working very hard to really find what I called the right <unk> to make sure that we.

Thomas Ingenlath: We have a year, as Per explained, which is a bit split between the first half, where we have one car company, and the second half, three cars. Obviously, with Polestar 3 and 4 joining over the course of this year, the volume proportion that Polestar 2 has to take in our overall sales is less than what the car had to perform in 2023. So that gives us, of course, a much greater chance to work with the car in a very favorable and good way. And we will see, as we said, a growth of volume in 2024, which is, I think, a very nice differentiator from a lot of others. And of course, that is due to the fact that we invested in this product portfolio is coming alive, and three and four join us, and we can enjoy that kind of volume growth purely because we now have these three cars in our toolbox. I think it's fair to that one.

<unk> most profitable customers are.

<unk> existing so all of these things will add to it and a <unk>.

Yeah, that's totally you should really put into that equation as well to start of production of <unk>, let's face it being in the U S. Producing further yes of course, if the parcel free as well a complete different base when it comes to judy's and stuff.

<unk> <unk>.

<unk>.

Thank you very much.

Thank you.

Yeah, but he spent as a reminder, if you wish to ask a question <unk> on your telephone keypad.

Now they're going to take all the next question.

And the next question comes from the line of tiny currently from Sea to your line is open. Please ask a question.

Great. Thank you hi, everyone just actually one of the salt on the gross margin question I was hoping you could maybe if I <unk>.

More detail on kind of what you're assuming for you would kind of general E V pricing by the end of the year versus now as well as roughly what kind of sales mix you receiving across the portfolio pretending pollstar three and pollstar for perhaps as well as a roughly taken care of any kind of high level thought on the regional.

Thomas Ingenlath: I think it's also very interesting to see that when we now launch the new cars, the interest for Polestar 2 also starts to pick up. We saw when we launched Polestar 4 here in Europe on our website and on our configurators, and people were putting in orders for Polestar 4. We definitely saw more interest in the Polestar 2 with test drives and all the picking up and so on. So we expect the Polestar 2 to benefit from the launch of the other cars because more people will just see that Polestar is a very nice brand. Thank you very much, Yvette.

Next cut out that you were assuming to get there.

I can't start let's debate on that one on all obviously, we talked about pollstar too. They they are kind of like.

Being there on <unk> through the year and then we add on.

The post or three and post fourth they have of course significant yeah. It makes it so so that will definitely help.

A N N.

Per Ansgar: And then my second question is on the gross margin guidance you have for the year, reaching double digits by the end of this year and in the high teens in 2025. I guess first on the double digits by the end of this year. You know, I understand the coming on of the higher margin vehicles is going to help with that. Is there any other driver, maybe on the cost side, that you can also explain that, you know, helps you get there at the end of this year and into next year? No, no, that's a good question.

I would say that's of course, if you have the same level of <unk>. The increased volume that would basically be done on the posed to three and four so forth obviously from the regional B, we see that that we we don't really have a lot of those safe last year in China. So that will be a pick up my view is that you'll rep will be very important.

Market and also you as an especially S to my side when we start to produce.

Three in Charleston that is a really good car for the U S market them being produced insurance <unk> that will be.

Any second improvement on our gross margins that makes it.

Yeah, four 2025 that mix.

40, 30, 30 in mind, which is Europe 40, 30 U S 30, China in 2024 will be the transitioning to assert when we come from a situation in 2020 for you, but obviously Europe was overwhelming.

Per Ansgar: Obviously, SUVs generally have higher gross margins than other cars, so it's like that is one of the main drivers. But we also have worked quite a lot with revenue, how we package the cars in terms of options and packs, etc. So that will improve our revenue. We are also working very hard on the product cost, and that will also support the other thing, which is also very important going into our sales and marketing strategies. We are also working very hard to really find what I call the right sales channel to really make sure that we sell cars where they are most profitable, because customers are existing.

<unk>.

China, very very little and then U S Davis.

This constant <unk>, it's uhm, a transition year, where we go to assess 40 30 30.

Perfect that that's all thank thank you the principle.

Thank you.

Now we're going to take our next question.

And the next question comes from the line of them <unk> from Paxis. Your line is helping piece asked a question.

Hi, good afternoon. Thank you. Thank you for taking your questions.

Wanted to follow up and I think you made comments earlier, perhaps you could comment on the expected channel mix in 2024, obviously.

Per Ansgar: So all of these three things will add to it. And the fourth thing, we should really put into that equation as well, the start of production of Polestar 3 in Charleston. Let's face it, being in the U.S., producing for the U.S., of course, gives Polestar 3 as well a completely different base when it comes to duties and stuff. Good factor. Thank you very much.

A little more reliant on the the fleet channeling 2023, I think he gave some media comments that.

<unk> three lines. So maybe you could just comment on channel mix in 2024.

You know I I.

Mostly for proposed start to been any comments on.

Ah dynamics for three or four as well.

Yeah no. Thanks.

<unk> with that question.

<unk>.

We we have had been from time to time dependent on one large <unk> <unk> that is a position where we are moving away from his head very improving Jose Shannon makes we expect now when we launch.

Winnie Dong: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad. Now we'll go and take our next question. And the next question comes from the line of Itai Mikaeli from Citi. Your line is open.

<unk> you as opposed to three and later on I was supposed to have for which are very good for the U S market. There, we'll get a lot of.

Customers in the lease channel, which is the normal way to sell cars in in U S, which we think is a good <unk> in your <unk> you have a completely different set up to where I put in a lot of more focus to really gets to what we call small literally like small companies a medium sized companies always L. 345, 10 20.

Itai Mikaeli: Please ask your question. Great, thank you. Hi everyone.

Cause because that's where we can really get good margins on those customers that has been a clear effort in especially in European region to get into that's H N as in <unk>.

Itai Mikaeli: I just actually want to follow up on the gross margin question. I was hoping you could maybe provide a little bit more detail on kind of what you're assuming for, you know, kind of general EV pricing by the end of the year versus now, as well as roughly what kind of sales mix you're assuming across the portfolio, you know, percent of Polestar 3 and Polestar 4 perhaps, as well as roughly if you can share any kind of high-level thoughts on the regional mix that you're I can start a little bit on that one, but obviously, we talked about Polestar 2, they are kind of like... being there on similar levels through the year, and then we add on Polestar 3 and Polestar 4. They have, of course, significantly higher mixes, so that will definitely help.

Okay, and and as far as as the the next into.

The company fleet, which is a little different from something like rental car how does the profitability of sales into company fleet, how does that compare to retail.

Not that at all [laughter] I mean, it's it's very important that you make a difference because indeed this is actually very healthy and good business. So.

Have I.

<unk> a lot of effort in.

Uhm manpower and actually establishing these contracts and we hope the L P and a lot a lot of.

Company color schemes because this is very.

Good and profitable business so mmm.

<unk> I think the strengths of pasta in Europe is where it comes from because we have that.

Understanding that.

Big Big portion of.

What your fingers private customers actually reached cruises company cuss channels and you have to be active in this <unk>.

Per Ansgar: And, yeah, I would say that, of course, if you have the same level of Polestar 2s, you will see that the increased volumes then will basically be done on the Polestar 3 and Polestar 4s, obviously. From a regional mix, we see that we didn't really have a lot of sales last year in China, so that will be a big gap. My view is that Europe will be a very important market and also the US, and especially, as Thomas said, when we start to produce Polestar 3 in Charleston, that is a really good call for the US market, and being produced in Charleston with no duties, etc., that will be a significant improvement on our gross margins and mixes. We have for 2025 that makes the number of 40-30-30 in mind, which is Europe 40-30, the U.S. 30, China.

Have contracts to to to be on the right off the customers.

Understood and and then maybe we could just follow up with the announcement from Volvo cars.

From <unk> earlier in the month and you know, they're they're refocusing.

At <unk>.

Perhaps you could just give some parameters on how if at all the changes the operational relationship.

You know between yourselves and Volvo as far as the manufacturing the platform sharing any other resource sharing as well. Thank you.

Yeah.

[noise] I'm I'm almost tempted to make a complete.

Distinction between the one thing is with which is how much how much <unk> available has been <unk> and on the other end our contracts <unk> relationship with both of when it comes to.

Developing cos mmm manufacturing costs and this was servicing costs I mean these are the three major areas, where we of course.

Thomas Ingenlath: And 2024 will be the transition year towards that. When we come from a situation in 2023 where obviously Europe was the overwhelming portion, China very, very little, and then the U.S. there, this constant 30 percent. So it's a transition year where we go towards this 40, 30, 30. Terrific. That's a hard thing.

Uhm have mmm.

On both sides.

The intention to keep it.

Flowing and continue with that.

Mmm <unk> any disturbance of the.

The amount of chefs at vulgar with half and Palestine I mean, there's.

[laughter], it's almost <unk>.

Strange to think in the very beginning when we were listing posted was one of the stories to be told that.

Itai Mikaeli: Thank you. That's very helpful. Thank you. Now we're going to take our next question, and the next question comes from the line of Dan Levy from Buckley. If your line is open, please ask your question. Hi, good afternoon.

<unk> ambition is not to keep forever that amount of almost majority of chess a 48%. It was almost a promise to the market to say that Volvo at some point, what reduce the ownership and that would be a bigger free float in small other investment.

Dan Meir Levy: Thank you. Thank you for taking the questions. I wanted to follow up, and I think you made comments earlier. Perhaps you could comment on the expected channel mix in 2024? Obviously, you've been a little more reliant on the Fleet Channel in 2023. I think you gave some media comments that you'd reduce that reliance. Maybe you could just comment on channel mix in 2024, mostly for Polestar 2, but any comments. You know, dynamics for three or fours.

Possible into pasta now this came [laughter] maybe from it.

Angle fill it comes to communication life, but it's it's the same effect our company growing up opening.

<unk> <unk> Ah relation when it comes to working together operationally <unk> untouched of that and we just.

Just come from our regular mm mm alignment meeting, where we go through our contractual business and stuff. This is of course something that's.

<unk> completely continue and we have to give that confirmation to each and every hour business partners.

Per Ansgar: Yeah, no, thanks. Thanks for that question. Obviously, we have been from time to time dependent on larger fleet sales. That is a position where we are moving away from; as I said, we are improving our sales channel mix. We expect now when we launch cars in the US, Polestar 3 and later on also Polestar 4, which are very good for the US market, they will get a lot of customers in the lease channel, which is the normal way to sell cars in the US, which we think is a good margin. In Europe, you have completely different setups.

Customers.

This is of course, something which they can build up <unk>.

Businesses spell important for Volvo they can build on having the revenue of servicing a low cost manufacturing costs and then it comes from time to time engineering, our <unk>, we have already before <unk>.

Head of course, I'll spell other relationships, we have a poster for being produced in Reno factory in Samsung We have of course big big benefit of <unk>.

Per Ansgar: We have put in a lot more focus to really get to what we call smaller fleets, like small companies or medium-sized companies where we sell 3, 4, 5, 10, 20 cars, because that's where we can really get good margins on those customers. That has been a clear effort, especially in the European region, to get into that sales channel in a more clear way. Okay, and as far as the mix into the company fleet, which is a little different from something like a rental car. How does the profitability of sales into company fleets compare to retail? Not bad at all.

Participating in the Tech and innovation that's happening there was an gili and I think we would be very fast advised if we would not embrace the <unk>.

Speed and the the power that there is on that side when it comes to electric technology and software and stuff so that type of <unk>.

Diversification of our relationships with other parties, not only mmm doing things together as well as well, but using a bit the broader Gili group I think that's absolutely.

Good and healthy and.

Beneficial development for Palestine, I think it's important to add also that that the corporation with Waterloo, which is very close doesn't stop here. We <unk>. We had a line in meeting earlier today, we discuss kind of like what are the some of it you just have to the development of the cost you <unk> upgrades and so on but you're also talking.

Thomas Ingenlath: I mean, it's very important that you make that difference because, indeed, this is actually a very healthy and good business. So we have, I think, invested a lot of effort and manpower in actually establishing these contracts and being out there and being in a lot of company car schemes because this is a very good and profitable business. So. That's where I think the strength of Polestar in Europe as well comes from because we have that understanding that a big, big portion of. What you think are the private customers actually reached through this company's cost channels, and you have to be active in these have contracts and to be on the radar of these customers.

<unk>. Thank you about what are the next step in our commercial operation and can we broke to get there in <unk> in the retailing networking and some of them being import does that that's what it is a continuous dialogue does not stop that also from that does take you know change that to what is happening.

<unk> I mean, you know that we have built our network in Europe in the U S. A.

About <unk>.

<unk>, even despite the fact that access motorbike pretty always contact it reached out to Mulder retailers and invite them to become pasta investors and investors in terms of investing into a poster space and that was a very good beginning it has.

Dan Meir Levy: And then maybe we could just follow up with the announcement from Volvo Cars from earlier in the month that they're refocusing. Perhaps you could just give some parameters on how, if at all, this changes the operational relationship between yourselves and Volvo as far as the manufacturing, the platform sharing, and the other resource sharing as well.

Been successful for both parties and when we know as the precast volume coin discuss expanding our network or presentation.

Presentation in the market of course, we do that together with the <unk> pardon us in in going further than that so this is just one example, web hopefully people see that this is actually continuing to be a very fruitful corporation responsible.

Thomas Ingenlath: I mean, I'm almost tempted to make a complete distinction between the one thing is with which is how much shares Polestar, Volvo has in Polestar, and on the other end, our contracts, our arm's-length relationship with Volvo when it comes to developing cars, manufacturing cars, and as well servicing cars. I mean, these are the three major areas where we, on both sides, have the intention to keep it.

Great. Thank you.

Thank you.

Yeah participants as a reminder, if you wish to ask a question. Please press stop online on a telephone keypad.

And now we're going to take our next question.

And the question comes from the land of Andrew <unk> from <unk> to your line is open piece ask a question.

Hi, good afternoon, everyone and thank you for a day to get our questions.

To follow up on the the capital race.

We touched on this briefly but would you mind, reminding us or or refreshing as you know what is the <unk>.

Thomas Ingenlath: Flow and continue with that, without any disturbance to the amount of shares that Volvo would have in Polestar. Thomas, It's strange to think that at the very beginning when we were listing Polestar, it was one of the stories to be told that Volvo's ambition was not to keep forever that big amount of almost the majority of shares of 48 percent. It was almost a promise to the market to say that Volvo would at some point reduce their ownership and there would be a bigger free float and more other investment possible into Polestar. Now this came maybe from a strange angle when it comes to communication-wise, but it's the same effect.

Expect it outstanding amount that you'll need to <unk>. How are you thinking about timing for that I know, we've touched on equity, but just curious on the timing and curious on the incremental now that you think you'll need to fulfill thank you.

And we're very happy to come back to US is very important point today, because let's face it I mean that is the <unk>.

Awesome very important <unk> <unk> <unk>.

Cover of the 1.3 billion that we have is the funding needs to be F cash flow breakeven that we've come up one building of that okay to be precise $950 million. So.

You can do the math, what's left and packing awesome things about handling the rest no I as in and of course, there are these different and it gets to that phone of course, we are looking through all the time.

Thomas Ingenlath: Our company growing up, opening up to other investors the opportunity to invest in Polestar is one thing. Our relation when it comes to working together operationally with Volvo is untouched by that, coming from our regular alignment meetings where we go through our contractual business and stuff. This is of course something which will completely continue, and we have to give that confirmation to each and every one of our business partners, our customers. This is, of course, something which they can build on, on which we can build on, and the business as well. Important for Volvo, they can build on having the revenue of servicing our cars, manufacturing our cars, and when it comes from time to time, engineering our cars. We have already, before, had, of course, other relationships as well.

Trying to see can be improve our cash flow <unk> investments et cetera to make sure that we are even limiting this get having said that though as I said before S. C. F O I would like to have more equity into the account <unk> over time, we would need to have a different doctor over the balance sheet. So again S.

At S. B C. The opportunity, we will take that and tried to do some equity raising here.

<unk> bows to make sure that we we don't have these remaining need and also to strengthen our balance sheet.

I would love to pick one thing up here and that is of course.

The.

Question about the 1.3, we have one of 1.3 covered and then.

The elephant in the room, yeah, Okay, but this this one <unk> and I really would love to emphasize how serious we take that and how much <unk> when we develop.

Thomas Ingenlath: We have a Polestar 4 being produced in a Renault factory in Busan soon. We have, of course, the big, big benefit of participating in the tech and innovation that's happening there within Geely. And I think we would be very falsely advised if we did not embrace the speed and the power that there is on that side when it comes to electric technology and software and stuff.

[laughter], sorry, <expletive> company, and when we face and that the.

Next month ahead for US is this an incredible.

Serious and important task too.

Keep this <unk>.

Maintain that's wholly that'd be say, okay. This is the frame, which we have and that's why we working.

And <unk>.

All the billions that we invest it.

Of course, I'd invest it into good stuff our product portfolio. The five car said, we will have.

Per Ansgar: So that type of diversification of our relationships with other parties, not only doing things together with Volvo but using a bit the broader Geely group, I think that's absolutely a good and healthy and beneficial development for Polestar. I think it's important to add also that the cooperation with Volvo, which is very close, doesn't stop here. We, as Tobias said, had our alignment meeting earlier today. We discussed some of the future steps in the development of the cars, future modular upgrades, and so on. But we're also talking very more distinctly about what the next steps in our commercial operations are. Can we work together in some markets, in the retailing network, in some of the being in Fort Resetta? So it's a continuous dialogue. It does not stop there at all.

Uhm develop to 2025.

And this is very predictable.

Very predictable costs that'd be have.

Predictable investments and we know exactly.

2024, 2025, what is to be done.

Other fact jot it.

I mean I'm affect us a sales volume of stuff I mean, yeah of course.

That can fluctuate, but this is stuff that we can handle and which will not create the big black hole that there is talked about so we are very serious and very confident about this 1.3.

Got it that that's super helpful. I appreciate all that color, maybe just as a quick follow up with the incremental 15% reduction in the workforce.

You know I know you are guiding opex for gross margins, but I'm curious to know how should we be thinking about opex and gross margins for 2024, given this production in terms of maybe modeling. Thank you.

If you do a little bit of the mess. We we did 10 per cent last year, we just kind of like starts to flow through from an AD contest active this year.

Thomas Ingenlath: So from that perspective, there is no change at all. And let's elaborate on that. I mean, you know that we built our network in Europe and in the US, and despite the fact it was a direct sales model, we always contacted, reached out to Volvo retailers, and invited them to become Polestar investors. I mean, investors in terms of investing into a Polestar space. And that was a very good beginning, and was successful for both parties.

Now do 15% that is obviously a delay on a dislike <unk> will count as you can do it quick Gary speed and you need to get go through like a process with union negotiations that lay offs and so on so you will gradually see that coming to the year and hands that we see that the.

Later part of the year will be significantly stronger than the first half of the year.

Got it okay. Thank you very much I'll I'll pass it all thank you.

Thank you.

Now I would like to hand off at <unk> at home with these questions.

Thank you no idea and thank you to everyone who has submitted that questions as usual, we're gonna take top three and he is a top three valid questions by retail shareholders.

Thomas Ingenlath: And when we now, with the three cars, with the volume growing, discuss expanding our network, our presentation in the markets, of course, we do that together with the Volvo dealers. And they are our partners in going further in that. So this is just one example where, hopefully, people will see that this is actually continuing to be a very fruitful cooperation with Volvo. Great, thank you.

I'm Gonna read them out and then Thomas and Pavel answer them. So the top question was.

Sure prices continue to be catastrophic despite <unk> for launching strong T V advertising there appears little high for improvement I'm sure. This concern is Shane My fellow investors. Please explain the causes and define a convincing plan for recovery.

Dan Meir Levy: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad. And now we're going to take our next question. And the question comes to the line of Andres Sheppard from Cantor Fitzgerald. Your line is open, please ask your question.

Thomas would you like to start.

Right that check this one out.

Obviously, we strongly believe that Oh, she has <unk> and when <unk>.

Talk about to try to find out it is of course, the very big thing was always the <unk> with.

Andres Juan Sheppard: Hi, good afternoon, everyone, and thank you for taking our questions. Just wanted to follow up on the capital race. I think we touched on this briefly, but would you mind just reminding us or refreshing us, you know, what is the expected outstanding amount that you'll still need to raise? And how are you thinking about timing for that?

Question Mark behind the funding.

And.

Rarely that's had a question about you know have a brand. It was so many people laugh out Brian to allow for a cause that's always a question about but the funding, but the funding nothing that is of course.

S as much as it's important for us to have the money for the for the remaining investment.

Well, an incredible important moment in order to give that opportunity for our share price to develop because at the question Mark is gone.

Thomas Ingenlath: I know we touched on equity, but I'm just curious about the timing and curious about the incremental amount that you think you'll need to fulfill. Thank you. And we're very happy to come back to this very important point today, because let's face it, I mean, that is for us a very important moment where we cover the 1.3 billion that we have as the funding until we have cash flow break even, that we have covered 1 billion of that. Okay, to be precise, 950 million.

Then we have.

The other effect free float was another thing that the free float of course.

S.

Sufficiently big this will be 6% plus for our pre float. So we ended up of course with at the end of the day at Aintree per cent free float, which is much healthier figure than we had before so that should of course, uhm help as well and be a big game changer.

Thomas Ingenlath: You can do the math, what's left, and pack an answer. There are all these things about handling the rest. No, and, of course, there are different angles to that one.

Yeah.

[noise] that's ma'am.

For this one.

Okay great.

Second question is with recent changes in funding do you think the previous statement of making a profit by 2025 is still achievable and I think <unk>. We talked about you may be answering the spot profit we have always got into cash flow breakeven site answer is going to land on that no. That's.

Per Ansgar: Of course, we are looking through all the time, trying to see if we can improve our cash flow limit, our investments, etc., to make sure that we are even limiting this gap. Having said that, though, as I said before, as the CFO, I would like to have more equity in the company because, over time, we need to have a different structure with the balance sheet. So again, as we see the opportunity, we will take that and try to do some equity raising here, to make sure that we don't have this remaining need and also to strengthen our balance sheet. I would love to pick one thing up here, and that is, of course, the question about the 1.3. We have one of 1.3 covered, and then the elephant in the room. Yeah, okay, but this is 1.3 real.

Correct things you'll be on what what is heading out press releases about what we talked about today <unk>.

We are confident on achieving out 10 to 25 targets on our volume Guidings and on our gross margin targets and basically what you're saying is that with the launch over the course of three posts before coming into production Firstly and then.

Starting to be sold anything the roads during the second half of this year, we see that the gross margin <unk> battery nicely. So, leaving this year will be more or less be on the chair directory to meet the 10 to 25 targets. So we are.

Confident or meeting that <unk>.

Cash flow breakeven for 2025.

Thank you and then the third question as well.

What's the future of pulsar after vulva exited as a partner.

Thomas Ingenlath: And I really would love to emphasize how serious we take that and how much when we develop Sorry, as a company and when we face the next month ahead, for us, this is an incredible, serious, and important task. Keep this, maintain that wholeheartedly, that we say, okay, this is the framework which we have, and that's where we work in, of the billions that we invest in. They, of course, are invested in good stuff, our product portfolio, the five cars that we will have developed by 2025. And this is very predictable, very predictable costs that we have, very predictable investments, and we know exactly, 2024, 2025, what is still to be done? Other factors, sales volume stuff. I mean, yeah, of course, that can fluctuate, but this is stuff that we can handle and which will not create the big black hole that there's been talked about.

We have already had <unk>.

It's not an exit and nothing changes.

I can try to clarify.

But it's still our strategic partner, it's not an accident close collaboration continue.

So I just use the time not into to extend on still go again back to the share price okay.

The two things that are set is one thing but there's.

Another thing 2024.

<unk>, we will have the X 10, some of our.

Product portfolio, we have too high margin sue's, joining in the time, where it's very difficult to anybody to chief we will achieve volume growth. We will achieve margin goes I mean <unk>.

Yeah, we'll just simply be much much more of a proof point of the S. S. Like muddle that'd be have been promoting some for such a long time, so I think.

Time time will tell I think that time has come 2024 that it becomes that much more as well and our and our fingers in our financials readable what kind of.

Andres Juan Sheppard: So we are very serious and very confident about this 1.3. Got it. That's super helpful. I appreciate all that color.

Good company, we are building him. So I hope that that will of course attract.

Per Ansgar: Maybe just as a quick follow-up with the incremental 15% reduction in the workforce. You know, I know you're not guiding OPEX for gross margins, but I'm curious, you know, how should we be thinking about OPEX and gross margins for 2024 given this reduction in terms of, you know, modeling? Thank you. If you do a little bit of the math, we did 10% last year, which should start to flow through from a head count perspective this year. When we now do 15%, there is obviously a delay in it. It's like some markets or countries you can do it quicker; in Sweden, you need to go through a process with union negotiations and layoffs and so on.

People to buy <unk>.

Perfect.

And with this we're done thank you very much for everyone joined the call by some to call in the webcast.

And we always have it any additional questions that you might have.

Thanks, So no. Thank you very much for taking the time.

That does conclude teleconference for today. Thank you for participating you might know all disconnect have a nice day.

[noise] [music].

Per Ansgar: So you will gradually see that coming to the year, and hence we see that the later part of the year will be significantly stronger than the first half of the year. Got it. Okay. Thank you very much. I'll pass it on.

Andres Juan Sheppard: Thank you. Thank you. Now, I would like to hand over to Bojana Flint for retail shareholders questions. Thank you, Nadia.

Bojana Flint: And thank you to everyone who has submitted their questions. As usual, we're going to take the top three. These are the three most voted questions by retail shareholders. I'm going to read them out, and then Thomas and Per will answer them. So the top question was: "Share prices continue to be catastrophic."

Bojana Flint: Despite Polestar 4's launch and strong TV advertising, there appears little hope for improvement. I'm sure this concern is shared by fellow investors. Please explain the causes and define a convincing plan for recovery.

Mmm.

[music].

Thomas Ingenlath: Thomas, would you like to start? Yeah, right. I'll take this one. Obviously, we strongly believe that our shares are undervalued. And whenever we talk about it, try to find out. It is, of course, the very big thing was always the overhang with our question mark behind the funding. And it's just rarely that we had a question about, you know, our brand. It was so many people love our brand, who love our cars, but there's always a question about, but the funding, but the funding. Now, I think that, of course. As much as it's important for us to have the money for the remaining investment, it's also an incredibly important moment in order to give that opportunity for our share price to develop because that question mark is gone. Then we have... The other effect, free float, was another thing that the free float, of course, is not sufficiently big.

Thomas Ingenlath: This will be a 6% plus for our free float. So we end up, of course, with, at the end of the day, an 80% free float, which is a much healthier figure than we had before. So that should, of course, help as well and be a big game changer. Yeah, um... That's Ram.

Thomas Ingenlath: My answer is for this one. Okay, great. The second question is, with recent changes in funding, do you think the previous statement of making a profit by 2025 is still achievable? And I think, Per, we talked about you maybe answering this, but profit, we have always guided to cash flow break even. So our answer is going to land on that. No, that's correct.

[music].

Bojana Flint: Thank you, Bojana. What we said in our press releases and what we talked about today here is that we are really confident of achieving our 2025 targets on our volume guidance and on our gross margin targets. And basically, what we are also saying is that with the launch of Polestar 3, Polestar 4 coming into production firstly and then starting to be sold and hitting the roads during the second half of this year, we see that the gross margin and the volume will pick up very nicely. So, leaving this year, we will more or less be on the trajectory to meet the 2025 targets. So we are confident of meeting the cash flow breakeven for 2025. Great, thank you. And then the third question is, What's the future of Polestar after Volvo exited as a partner? It's not an exit, and nothing changes. No, again, just to clarify, it's still our strategic partner. It's not an exit.

Bojana Flint: Close collaboration will continue. So I just use the time now and to extend and go back again to the share price. Okay. The two things that I said are one thing, but there's, of course, another thing.

Thomas Ingenlath: 2024, back to it. We will have the expansion of our product portfolio. We have two high-margin SUVs joining at a time when it's very difficult for anybody to achieve volume growth. We will achieve margin growth. I mean, that year will just simply be much, much more of a proof point of the asset-light model that we have been promoting for such a long time. So I think time will tell.

Thomas Ingenlath: I think that the time has come, 2024, for our figures, in our financials, to show that much more clearly what kind of good company we are building here. So I hope that that will, of course, attract people to buy our shares. Perfect. And with this, we are done.

Bojana Flint: Thank you very much to everyone who's joined the call, both on the call and the webcast. And we're always here with any additional questions that you might have. Thanks a lot.

Operator: Thank you very much for taking the time. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day. Thank you for watching! ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Thank you for watching.

Bojana Flint: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Hello everyone, I'm Bojana Flint from Polestar Investor Relations. Thank you for joining Polestar's Business and Outlook Update Call. Joining me today are Thomas Ingenlath, our CEO, and Per Ansgaar, our CFO. Before handling over to call to Thomas, I would like to remind participants that some of our comments today will be considered forward-looking statements under U.S. Federal Security's laws, and are subject to numerous risks and uncertainties that may cause Polestar's actual results to differ materially from what we have been communicating. These forward-looking statements include, but are not limited to, statements regarding.

Bojana Flint: The future financial performance of the company. Production and Delivery Volumes, Near-term Outlook and Medium-term Targets, Fundraising and Funding Requirements, Macroeconomic and Industry Trends, Company Initiatives, and Future Events. Forward-looking statements made today are effective only as of today, and Polestar undertakes no obligation to update any of its forward-looking statements. For a discussion of some of the factors that could cause our actual results to differ, please review the risk factors contained in our SEC filings.

Bojana Flint: As Polestar is adjusting the release date for the 2023 Preliminary Unaudited Financial and Operational Results to a later date, in order to complete the first full year of compliance required by the Sarbanes-Oxley Act of 2002, we won't be in a position to discuss the matters pertaining to those results today. With that, I'd like to turn the call over to Thomas. Please go ahead. Yeah, thank you, Bojana. Good morning, everybody.

Thomas Ingenlath: Good afternoon. Thank you for joining us on our call today. And as Bojana mentioned, I'm sitting here together with Per Ansgar, who joined our company in January as the new CFO. I'm sure some of you have met before, but, of course, this is our first analyst and investor call together. And yeah, I'm delighted to have you here with us. And, of course, we are happy for you to have joined us. Please, could you do a brief introduction of yourself?

Per Ansgar: Yeah, thank you very much, Thomas. And good morning and good afternoon to everyone here. When Thomas approached me not so long ago, I was very happy and excited to get the question. I have been following Polestar for quite a long time, and I think Polestar is a very interesting and great brand. And I definitely believe in Polestar's future. For close to 30 years, I have worked in the automotive industry, with Volvo cars, Ford Motor Company, and also Geely. So with that experience, I think I can add quite a lot to the Polestar business. And I've also seen Polestar from those angles quite a lot.

[music].

Per Ansgar: So I am very well aware of what we are doing here and what the future looks like. I know quite a lot of the people on the team here, so I'm happy to work with Thomas and his team, and I will also look forward to interacting with you going forward. And with that, I will hand over to Thomas.

Thomas Ingenlath: Yeah, thanks, Pam. Yesterday we made announcements that are very important for the future of Polestar. And I will start here today with the funding part. Now, as you know, since we presented the strengthened business plan in November, we have been very clear that we will require $1.3 billion in additional external funding to reach that cash flow break-even moment in 2025. These were the two really important anchor points of this announcement, and we always said that, yes, we are actually making good progress when it comes to this. External funding And of course, you can imagine, we are very happy now that yesterday we could announce a secure syndicate of leading global banks that come together for approximately one billion dollars through a three-year loan facility. And that represents, of course, a very strong statement of confidence in Polestar and in our future. And I was right; the majority of the required funding secured. We will now focus on delivering on the business plan, including the cash flow breakeven. And, The second important part, the high teens cross margins in 2025.

Thomas Ingenlath: Alongside the funding, we set out other key actions within the plan, and I want to update you on our progress on those. We will benefit from a richer product mix, obviously, with the two SUVs coming in with high margins. And Polestar 4 sales are accelerating around the world. Polestar 3 is now in production in Chengdu.

Thomas Ingenlath: And on both cars, we will offer greater personalization for the customers, increased packages, and options. And with that, of course, that will lead, as well, to higher margins in this premium luxury segment. It doesn't stop here.

Thomas Ingenlath: We have the Polestar 5 that will be in production next year, and the prototype manufacturing is accelerating over the course of 2024, leading to the Thank you.

Hello, everyone I'm, Brian Flynn from Pollstar Investor Relations. Thank you for joining posters business and outlook I'll take hold.

Joining me today are Thomas and get them off I'll see aisle and Pat and Scott All CSI.

Thomas Ingenlath: The expansion of our manufacturing footprint is on track. We have hit important production milestones for both Polestar 3 in South Carolina, US, and for Polestar 4, in Busan, South Korea. Both developments are, of course, very important steps for us to create that more diversified and de-risked manufacturing footprint, which will, on the one hand, improve profitability in some of our core markets, such as the US, but, as I said, the risk... our company, Polestar. Marketing, distribution, we're making good progress. We have advanced efforts in optimizing our sales footprint to improve profitability as we scale.

Before handing over to call to Thomas.

I'd like to remind participants that some of our comments today will be considered forward looking statements under U S Federal Securities laws.

And are subject to numerous risks and uncertainties that may cause bolsters actual results to differ materially from what we have communicated.

These forward looking statements include but are not limited to statements regarding <unk>.

The future financial performance of the company.

Production and delivery volumes.

Near term outlook and medium term targets fundraising and funding requirements macroeconomic and industry trends company initiatives and other future events.

Forward looking statements made today are effective only as of today and posted undertakes no obligation to update any of its forward looking statements.

For a discussion of some of the factors that could cause our actual results to differ. Please review the risk factors contained in our SEC filings.

Thomas Ingenlath: Of course, now with the cars in our portfolio, we are now significantly scaling the business. This work is led by Christian Alverfors, who is our new head of sales, joined us well earlier this year together with Per. And he has already made lots of progress in a very short time, for example, in Europe, where we are shifting some countries from a direct to an importer model, and in the US, where we are transitioning towards a wholesale model. Cost Management, cost remains a priority, and our efforts are delivering results. In summer last year, we announced our first round of cost optimization and a 10% headcount reduction.

I suppose there is adjusting the release date for the 20th twenty-three preliminary unaudited financial and operational results to a later date in order to complete the first full year of compliance required by the Sarbanes Oxley Act of 2002, we won't be in a position to discuss the matters pertaining to those results today.

With that I'd like to turn the call over to Thomas. Please go ahead.

Yeah. Thank you Blake.

Good morning, everybody good afternoon.

Thank you for joining our call today.

And especially on the mentioned I'm sitting here together with Pat and Scott, who joined our company in January as the new CFO.

Thomas Ingenlath: And now, Peer is driving the work here even further, and we recently announced an additional 15% headcount reduction. And of course, Bezos focused on CAPEX and working capital inventory management, all in order to become leaner and more efficient as we continue to grow. Now, before we move to the outlook, let me say a couple of words about last week's announcement regarding the future ownership structure. First and foremost, I am very pleased to have Geely Sweden now as a major shareholder. It's a more independent, a stronger Polestar the position we are in now with Geely in the ecosystem.

No problem.

Probably some of you have met before but of course. This is our first analyst and investor call together.

Yeah, I'm delighted to have you here with US and of course happy for Ya joined US. Please if you could do a brief introduction of yourself, yes. Thank you very much two months and good morning, and good afternoon to everyone here and.

Went to mass approach me not so long time ago I've always said.

Barry.

Excited to get the question I have been following Pollstar quite a long time and I think Paul studies of battery.

Interesting and great brand and I definitely believe in the Cold starts you chair I Havent.

Close to 30 years.

In the automotive industry in <unk>.

Cars Ford Motor Company and also in a delayed.

Thomas Ingenlath: And as Geely has stated, we will have, of course, stronger technological collaboration that has developed naturally over the course of our product development very naturally over the last year. But they have also confirmed, of course, the ongoing financial and operational commitment to Polestar, including future fundraising activities. We welcome new shareholders, both institutional and retail, and, of course, we maintain our great relationships with Volvo Cars. All the cars will retain an 18% stake in Polestar, and, on top of that, they have extended the shareholder loan by 18 months to the end of 2028, which is, of course, a clear sign of their continued trust and belief in our future. So let me hand over now again to Peer to give an update on the 24-hour.

With that experience I think I can add quite a lot to the Polish business and I've also seen of course post often those I guess quite a lot. So I am very well aware of.

What we are doing here and what the future looks like and I know quite a lot of the people in the team here is I'm happy to work with to amass and his team and I will also look forward to interacting with you going forward here and by that let me hand back over to two months.

Thanks Pat.

Yesterday, we have made announcements that are very important for the future of paulista.

I will start here today with funding pot that I've seen.

Now since we presented.

In November the strengths of the business plan, we have been very clear that.

We will require a $1 $3 billion in additional external funding to reach that cash flow breakeven moment.

Per Ansgar: Yeah, thank you, Thomas. And as you heard, Thomas described a lot about our production and ramp up of Polestar 3 and Polestar 4. We have started production of Polestar 3 in China. Polestar 4 has also started production, and we are delivering that to our Chinese market. Of course, now with lead times and logistics and also expanding to different markets around the world, we will see global deliveries of those cars commence in the summer here. And obviously, right now, we are fully focused on doing the final investment for those cars, building up the production capacity, and also launching activities to secure strong sales in the second half of the year. Of course, now you understand that this year there will basically be two different characters.

2025 seats to really main important anchor points of this announcement and we always said that.

Yes, we are actually making good progress when it comes to this.

External funding.

And of course, you can imagine I'm very happy now that yesterday, we cut.

<unk>.

Secured.

Syndicate of leading global banks that comes together to approximately 1 billion.

All of us so as free ague Freaky the loan facility.

And that represents a of course, a very strong statement of confidence and pulse and then our future.

And that was this maggiore.

The majority of the required funding secured.

I'll now focus on delivering on the business plan, including the cash flow breakeven.

And second important part of the high teens gross margins.

Per Ansgar: The first half of the year will predominantly be based on Polestar 2 sales, while the second half of the year will be completely different with the actions we have taken, both on the cost side but, of course, much more importantly, on the deliveries of the two high-margin SUVs. This combination will give volume momentum and drive higher margins into the second half of the year. And as we guided yesterday in our release, by the end of this year, we expect volume growth that supports the 2025 targets on volumes, and we also expect a double-digit gross margin in the latter part of this year. With that, let me hand it back to Thomas for his concluding remarks, and then we can go on to your questions. Yeah, thanks, Pam. So, Polestar 3 production has started. Preparations at the U.S. plant.

In 2025.

Yeah.

Alongside the funding we set out at the key actions within the plan and I want to update you on our progress on those.

We will benefit from a richer product mix, obviously with the two suvs coming in with high margins.

And post the four says accelerating around the world.

Three is now in production in Chengdu.

And on both coasts, we will offer.

Greater personalization for the customers.

Increased tax and options.

And with that of course that will lead us to higher margins is premium luxury segment.

It doesn't stop here we are.

Have to post a five that will be in production next year.

And the prototype manufacturing is accelerating over the course of 2024, leading to the <unk>.

Start of production in 'twenty five.

The expansion of our manufacturing footprint is on track.

We have hit important protection milestones for both supposed to free in South Carolina U S and for the past four.

Thomas Ingenlath: The second manufacturing footprint is in full swing, with Polestar 4 sales picking up rapidly, customers are falling in love with Polestar 4, and Polestar 5 final prototype series are being built this year in that purpose-built factory dedicated to this sports car aluminum bonded technology.

And Pusan South Korea.

Both developments they of course very important step for us to create a more diversified and de risked manufacturing footprint.

Well, it's really on one hand improved.

Improved profitability in some of our core markets such as the U S. But.

Thomas Ingenlath: We have secured funding, we announced yesterday, and three cars are in production. So we're making really major progress this year. Two words, cash flow break even in 2021. Our model lineup positions Polestar as the performance car brand in the electric age. And with the news of yesterday, we look with great, great confidence at the future of our company. So with that, I hand over to the operator for the Q&A. Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 1-1 again.

Well as I said derisked.

Our company Postop.

Marketing distribution, we are making good progress.

We.

<unk> advancing efforts.

Optimizing our sales footprint.

To improve the profitability as we scale of course, I would say cost in our portfolio and scaling the business knowledge significantly.

This work has slipped by Christian <unk>, who is our new head of sales joined US earlier this year together with Pat.

And he has made already in Sperry short time lots of progress for example in Europe, where we are shifting some countries from a direct to an import model and in the U S, where we are transitioning to us.

Operator: Please stand by. We'll compile the Q&A roll studies. It will take a few moments. And now we're going to take our first question, and it comes from the line of Tobias Beith from Redburn Atlantic. Your line is open.

The wholesale model.

Cost management.

Cost remains a priority and our efforts are delivering results.

In summer last year, we announced our first round of cost optimization, and 10% head count reduction.

And now ill pass driving to work here.

Even further and we recently announced an additional 15% head count reduction.

Tobias Beith: Please ask your question. Thomas, Per, and Bojana, good afternoon, and thank you for taking my questions. Pages 87 through 91 of the Facilities Agreement, disclosed on Form 6K yesterday, outline the covenants on the new debt.

And of course pass all of US are focused on the Capex working capital inventory management all.

All in order to become leaner and more efficient as we continue to grow.

Now before we move to the outlook, let me say a couple of thoughts about last week's announcement regarding the future ownership structure.

Per Ansgar: Given volume declined sequentially in 4Q23, despite having the full effect of the Polestar 2 refresh, and that retail sales in January appear to be weaker year-on-year, what gives you confidence that you're able to meet the minimum revenue threshold of $5.4 billion this year, which you estimate is equivalent to retail sales of about 100,000 units? Yeah, this is Per. I can take that question. Obviously, when we closed the club loan here, which we have been very happy to get, we are, of course, aware of the covenants, and the covenants are built on the business plan that we presented late last year. That business plan took into account the somewhat more difficult BEV market. So this is completely in line with our expectations. We don't see a problem from that perspective.

First and foremost of course very pleased to have Julie, Sweden, though as a major shareholder.

It's.

More independent of stronger Postop the position, we're in now within Mis, having Chilean the ecosystem and Steely as stated we will have.

Got stronger technological collaboration that has developed with over the course of our product development very naturally over the last year.

But they also confirmed of course, the ongoing financial and operational commitment to pause, including future fund raising activities.

We welcome new shareholders, both institutional and retail.

And of course.

We maintain our great relationships with sulfur costs.

<unk> will retain 18% stake postop.

Per Ansgar: Okay, understood. On a pro forma basis, assuming all outstanding credit facilities are drawn, I calculate that Polestar can take onboard about a billion dollars of new debt without breaching the total indebtedness covenant. Is the plan now to raise incremental capital via equity and use the headroom for refinancing and resizing the short-term working capital facilities outstanding? Yeah, as we said before, when we presented our business plan late last year, we talked about getting more money into the company through a combination of loans and equity. Now we have almost a billion dollars in loans. Obviously, we are looking into more equity. If you asked me as a CFO, would I be happy to have significantly more equity?

And.

On top of that they have extended the shareholder loan by 18 months to the end of 2028, which is of course, a clear sign of the continued.

We believe in our future.

So let me hand over now again back to Pat to give an update on the 24 outlook.

Yeah. Thank you two months and as you heard the two month described a lot on our production and ramp up of post a three year old stuff for we have started production of a poster three in China pull stuff. What has also started production and we are delivering that to our Chinese market of course, now with lead times and logistics and Allstate.

Lending to different markets of the World, We will see the global deliveries of those star caused to commence.

In the summer here and obviously right now we are fully focused on doing the final investment for those cars building up the production capacity and also launching activities to secure strong sales in the second half of the year.

Per Ansgar: Yes, I would like to have that. So we are preparing ourselves to fund more equity as soon as we think it's the right time to do that. Talk comes here about the right time. I mean, obviously, the order that this came now is the debt financing now and us progressing the company. This year, the two SUVs are coming to the business really, using now the system that we have installed in the sales organization in all the 23 countries. Of course, we feel that that year will be very important for Polestar to develop as a company, to actually prove the points that we have always been making about the advantage of a S-supplied model, and that our company will, with the three models in our lineup, be in a much better position to actually portray that successful business model, and we are feeling much more confident that the equity round at that point in time will be a very good time to address this And just one last question.

Of course now you understand that this year will be basically two different.

The Telerik tests, the first half of the year.

Predominantly based on posted Tuesday.

While the second half of the year, we will be completely different with the actions we have taken both on the cost side, but of course much more importantly, so on the deliveries of the two high margin Suvs. This combination will be the volume momentum and drive higher margins into the second half of the year.

And as we get Guy did yesterday now released by the end of this year, we expect the volume.

Growth that supports the 10 to 25 targets on the volumes and you know what's the expected double digit gross margin.

In the later part of this year with that let me hand back to two months for concluding remarks, and then we can go on to your questions.

Yeah. Thanks Pam.

So post the three production has started preparations in the U S plant.

Thomas Ingenlath: How does Polestar think about branding? If I take a look in China, for example, the new Polestar 4 is where Geely badging is at the rear. Do you think this causes confusion?

<unk> manufacturing footprint in full swing.

Post the fourth sales picking up rapidly customers are falling in love with the support.

And post a five final prototype series are being built this year and that purpose built factory dedicated to this spot aluminum bonded technology.

Thomas Ingenlath: Since it's not a bad thing, it's a principle that the car industry is very familiar with. We are sharing technology with Volvo, we are sharing technology with Geely, and we are building our Polestar 3 on technology that we share together with the EX90. I think it is the proof point of us building a very strong identity as a Scandinavian design brand with our very unique technology features. Obviously, always very customer-oriented technology that you can experience. And the Polestar 4 as a highlight, I mean, really introducing the virtual rear window with a much, much better rear view through the camera view than through the very limited view that you have through the rear window. These are unique features that, of course, make the brand shine. I'm certainly...

We have secured funding, we announced yesterday and free cost and production.

So, we're making really major progress this year towards cash flow breakeven in 'twenty five.

Our model lineup.

Positions pulse as the performance comp rent in the electric H.

And with the news of yesterday, we look.

Great great confidence into the future for our company.

So it was that.

Over to the operator for the Q&A session.

Thank you so much.

As a reminder, if you wish to ask a question. Please press star one on your telephone keypad and Lakeland name to be announced do we draw a question. Please press star one again, Nathan Bobble composite can narrow studies will take a few moments.

And now we're going to take on the first question and it comes from the line of Tobias <unk> from Redburn Atlantic. Your line is open. Please ask your question.

Tobias Beith: Thank you very much for driving the strong brand expression of each of our cars and supporting that, and when you see how the Polestar 4 shines as a star in shows where people are very, very pleased about it, or they would say that, very I have very good comments about how the car looks, and how the car puts together a very attractive offer to the customers. And I certainly think that Polestar 4 does a great job for our brand, positioning, and offer. Alright, I appreciate the answers.

Thomas Patton Liana good afternoon, and thank you for taking my questions.

Pages 87 through 19 wanted the facilities agreement disclosed on form 6K yesterday outlined the covenants on the new debt.

Given volume declined sequentially and <unk> 23, despite having the full effect of pulse start to refresh and then retail sales in January appear to be weaker year on year. What gives you confidence that you're able to meet minimum revenue threshold of $5 $4 billion. This year, which estimates is equivalent to <unk>.

Operator: Thank you all. Thank you. Now we're going to take our next question. Just give us a moment. And the next question comes from the line of Alex Potter from Piper Sandler.

<unk> sells at about 100000 units.

Yeah. This is Pat I can take that question, obviously, when we when we close the club loan area. If it had been very happy to get we are of course aware of the covenants and the covenants are built on the business plan that we.

Alexander Eugene Potter: Your line is open; please ask your question. Perfect. Thanks very much. So maybe the first question is on the headcount reductions. I'd be interested in hearing.

Presented late last year that business plan took into account.

Thomas Ingenlath: I guess the job functions that you're going to be reducing headcount in, what had these folks been working on, and what sacrifices, operational sacrifices, do you think you'll be making now that they will no longer be with the company? A little bit of a two-fold answer here. I mean, big time, this is a fairly general reduction in order to drive efficiencies. A company that has been growing that fast as Polestar, I think even every company, of course, if you look into it, you have this potential to drive efficiencies. That is not an unknown tool.

The somewhat more difficult market. So this is completely in line with our expectations. So we don't see a problem from that perspective.

Okay understood.

On a pro forma basis.

Assuming all outstanding credit facilities are drawn.

Like the pulse talking onboard about $1 billion, new debt without breaching the total indebtedness covenant.

It is the plan now to raise incremental capital via equity and use the headroom for refinancing and reciting the short term working capital facilities outstanding.

Yeah, as we said before when we presented our business plan late last year, we talked about it.

Getting more money into the company a combination of loans.

Loans and equity now we have almost a billion dollars of loans. Obviously, we are looking into more equity. If you ask me as a CFO would I'd be happy to add significantly more equity, yes, I would like to have that so we are preparing ourselves to find more equity as soon as we think it's the right time to do that.

Thomas Ingenlath: And as I said, and that's unfortunate, this measurement is for the organization. Having said that, and each and every individual having said that, it is not bad to once in a while actually squeeze its efficiencies and get this higher performance out of the company. Having said that, there are certain elements of the built-up phase within Polestar, which of course, reached a certain degree of completion, and we are turning towards a different era in Polestar, and that is after building up all the tools and all the systems. We are, of course, now going into the phase where we are using them. Of course, the strengthening of what it takes to sell the cars, to actually be out there in the market and drive profitable sales is what we concentrate on now. And for example, building up a digital system that supports this is, of course, rather in the completion phase. And, of course, there you have probably a higher portion than the 15% of the head count reduction that you can.

Talk to you about the right time, I mean, obviously.

The order.

This came now with.

The debt financing now and us progressing.

Penny.

This year, the two suvs coming to the business really.

Using the other system that we have installed in the sales organization in all three countries of course, we feel that that you will be very important for pole star to develop as a company to actually.

Proof points that we have been always making about the advantage of our supply model and that our company will.

With the three models in our lineup B and the.

Much better position to actually portrayed that successful business model.

And.

We are feeling much more confident that the equity round.

At that point in time, it will be a very good.

Time to address this question.

Alright. Thanks.

Just one last question how.

Thomas Ingenlath: Okay, that actually is a good segue into my next question. You mentioned in your prepared remarks that you focused on the sales channel. I think you mentioned something about going to a wholesale model in the United States. Can you elaborate a little bit on how your go-to-market strategy is changing or growing? Yeah, I'd love to do that.

How does Pollstar think about branding if I if I have a look in China. For example, the new pulse thoughtful as wide geely, but you can get the rare due.

You think this causes confusion.

Since it's not a bad thing it's a.

Uh huh.

Principal debt.

The cotton industry.

It's a very familiar with we are sharing technology with volatile weird sharing technology with Chile, we are building our posts a free on technology that we sat together was a <unk> 90.

Thomas Ingenlath: To the U.S. In the very beginning, we took the decision not to go for the 100% direct sales model as we had it in the rest of the world, in the US, because we just simply felt it would hinder us from going fast to market with all the lawsuits and whatever that would have been connected to pushing that through. So we already had kind of a hybrid model working with dealers that sell our cars in a more traditional wholesale way, but we still implemented and held on to some direct sales principles that we had here in Europe. And we actually found that that is a very inefficient combination.

The proof point of US building, a very strong identity as a Scandinavian design brand with our very unique.

Technology features.

Obviously always very customer oriented technology that you can experience and the post a full as a highlight I mean really introducing.

The virtual real window with a much much better rearview through the.

The Kmart view then through the <unk>.

Very limited view that through.

These are unique feature sets of course make the make the Brent chime in.

I'm certainly.

Very much.

Thomas Ingenlath: And in the case where we have the dealers out there, we really embrace now that we use that to the full benefit of that wholesale model and really don't try to make a mishmash but to go for this very clear principle there. In the rest of the world, especially now here in Europe, where we have our direct sales model, we see that the fairly theoretical idea of the beginning needs evolution, the evolution that we actually enable a certain degree of higher autonomy within the space, less central steering, a bit more responsibility for the markets and into the individual spaces, just in order to drive performance. And we are very convinced that Christian will drive to make this into a very successful business model for us. So there's definitely a big, big, um, plus to be gained from working on this. Okay, excellent. Thanks. Maybe one last one.

Driving the strong brand expression of each and our costs supporting that and when you see how the pulse to fall.

Science is a star and shows.

People are very very <unk>.

Please but whatever.

Saying that vary.

A very good comments about how the car looks how how the comp puts together a very attractive.

Offer to the customers and us.

Certainly think that especially as opposed to four does a great job for our brand and positioning and so forth.

Alright.

The answers thanks al.

Thank you.

Now well go and take our next question.

Just give us amendments.

And the next question comes from the line of Alex Potter from Piper Sandler. Your line is open. Please ask your question.

Perfect. Thanks very much.

So maybe the first question is on the head count reductions I'd be interested in hearing.

I guess, the the job functions that youre going to be reducing head count in what had these folks have been working on and what sacrifices operational sacrifices do you think you'll be making now.

Thomas Ingenlath: And maybe it's a slightly unfair question, because Polestar 4 hasn't really been in the market for very long yet. But I know that you had mentioned it was going to be a major tool, especially in China, and obviously it's being produced in China. So maybe the initial reaction; anything you can say about how Polestar 4 is being received specifically in the Chinese market? Thanks. Yeah, the question is a bit early because, of course, it's at the moment in the face where we see how.

That they will no longer be with the company.

But to answer your I mean big time. So is this a fairly general reduction in order to drive efficiencies a company that has been growing that process Pollstar I. Thank each and every company of course I mean, if you look into it you have this potential to drive efficiency said this is not an unknown.

Mm tool.

Hmm.

Sad and that's unfortunate this measurement is the organization, having said that and each and every individual having said that it is not bad to once in a while actually.

Thomas Ingenlath: Journalists, test drive results, give feedback for us, while for the sales, of course, this is still a bit too early to have a conclusion on that, from the test drives, from the feedback of all the journalists, all the opinion leaders there in China. And I say that it's surprising because this car gets a lot of credit for being actually a performance car, which we shouldn't be surprised about because that's what we are. A performance car brand. But obviously, this was never before that much in the focus in China.

Squeezes efficiencies.

Get this higher performance out of the company.

Having said that.

There are certain elements of the buildup face was in poster which of course reached.

Certain degree of completion, and we are turning to us a different.

Iraq and Palestine that is after building up all the tools and all the.

Systems, we are of course now going into the face we are using them.

Of course.

The.

The strengthening of what what it takes to to sell the cost to actually be out there in the market and drive.

Thomas Ingenlath: And that they actually see now the actual great attribute and the performance of this car. And what we have made out of this technology in terms of being a performance car, I think it's a very, very good starting point. Why that second element, which we think will be very crucial as well?

Five profitable sales is what we concentrate on now.

And for example building up a digital.

System debts that supports this.

There's of course, rather in the completion phase.

And of course that you have.

A higher portion than the 15% of the.

The head count reduction that you can execute.

Thomas Ingenlath: It's not quite as dominant yet. And that is the Polestar OS, the software index car, and its combination with the technology that we bring through the JV with Meiju, the mobile phone company. I think it's just, very clear, the mobile phone is in an event just in front of the Beijing Motor Show in April, coming to launch. So that element is actually going to be deployed only in the very near future.

Okay that actually is a good segue into my next question you mentioned in your prepared remarks.

Focus on on the sales channel.

I think you mentioned something about going to a wholesale model in the United States can you elaborate a little bit odd.

Now your go to market strategy is changing or growing.

Yes love to do that.

To the U S.

In the very beginning we took the decision to not go too tall for the 100% direct sales model as we had it in the rest of the world in the U S. Because we just simply.

Thomas Ingenlath: So I think then this smart device aspect of the Polestar 4 having this full integration of its own phone will be much more tangible, and that experience is still to come. So we definitely see this market now building up. But they have to do a lot of work in terms of building up the network.

That would hinder us to go faster to market with all the lawsuits and whatever that would have been connected to.

Pushing that through so we indeed already had kind of a hybrid model working with them.

Thomas Ingenlath: So the JV is very busy launching the product, launching the phone, and, of course, investing in and building the sales network of Polestar in China. But Polestar 4, the first reaction of journalists and people who drove the car, was very positive. Great. Thanks, everyone.

Dealers that sell our costs in a more traditional wholesale way, but we implemented still and hold onto some direct sales.

Suppose that we had here in Europe, and we actually found that that is a very inefficient combination and in the case, where we have the dealers out there, we've really embraced and all that.

Alexander Eugene Potter: Thank you. Now we'll go and take our next question. Just give us a moment.

We use that to the full benefit of that wholesale model.

Operator: And the next question comes from Winnie Dong from Deutsche Bank. Your line is open; please ask your question. Hi, thanks so much for taking my questions.

It's really down.

Don't try to make a mismatch, but two to go for this.

Very clear principle there.

Winnie Dong: I was wondering if you could specifically comment on the order pattern or the demand environment that you're seeing specifically for postcard two for the year, given that, you know, a large quantity of volume for this year is going to be coming from that vehicle and Polestar 3 and 4 in the second half. So, I was wondering if you could maybe, yeah, basically comment on the demand environment for that one. Excuse me, we didn't understand here, nobody in the room, which pattern? We just couldn't hear it properly.

And the rest of the world, especially of course now he Europe Bev.

Half of our direct sales model, we see that.

The.

Fairly theoretical idea of the beginning needs.

The evolve and that evolution that we actually.

And Eva.

A certain degree of higher autonomy within the space.

Less central steering a bit more responsibility into the markets and to the individuals basis, just in order to drive performance and we are.

Very convinced that Christiane.

Will.

Drive.

Sorry to ask this into a very successful business model for us So that's definitely a big pick.

Winnie Dong: Winnie, is it the quarterly phasing, is that what you're asking? So just the demand environment for that vehicle and auto trends for that vehicle. Polestar 2. Polestar 2, you're right.

Plus to be to be gained.

On this side.

Okay excellent. Thank maybe one last one.

Maybe it's a slightly unfair question because pollstar for Hasnt really been in the market for very long, yet, but I know that you had mentioned pollstar for where its going to be a major tool.

Thomas Ingenlath: Polestar 2, yes. Well, um... Posito is good, and we have obviously now this year, the full, full year of the upgraded Polestar 2. And what we see is that the long, long range that we... Chief with the rear wheel drive, very positive reception for that, but at the same time, and especially since we made this now a very competitive offer, kind of like, either you take the longest range in the rear wheel drive, or you go for a higher performance in the four-wheel drive, and that's something that is finding great interest. But I would love to emphasize as well one thing. And we were very, much interested in selling a very high number of Polestar 2, which, of course, in a difficult environment, and us being very careful about the margins, led us to a situation which was, volume-wise, always a bit tricky. That's totally different in 2024.

Especially in China.

I would say, it's being produced in China.

So any of maybe the initial <unk>.

Reaction anything you can say about how pollstar for us being with you specifically in the Chinese market.

Yeah. The compression is a bit early because of course.

It's at the moment in the phase, where we see how.

Journalists test drive.

Results.

Good feedback for us.

While for the sales of causes this pill.

A bit too early to have a conclusion that we have.

From the.

From the test drives from the feedback of all the journalists alder.

Opinion.

Lead us there in China.

And as I said not surprising because.

This car.

That's a lot a lot of credit for.

For being <unk>.

Actually.

Our performance car, which.

We shouldnt be surprised about because that's what we all had performance car brand.

But obviously this was never before that much in the focus in China.

And that they actually see now the.

That's actually great attribute and the performance of this car.

And what we made out of this technology in terms of being a performance Scott I think it's a very very good starting point.

Why is that second element, which we.

Think will be very crucial as well, it's not quite as dominant yet.

And that is the pulse to Oss the software index score and its combination to the technologies that we bring through the JV with major with a mobile phone company I think it's just very clear the multi phone.

Thomas Ingenlath: We have a year, as Per explained, which is a bit split between the first half where we have one car company and the second half, three cars. Obviously, with Polestar 3 and 4 joining over the course of this year, the volume proportion that Polestar 2 has to take in our holistic sales is less than what the car had to perform in 2023. So that gives us, of course, a much greater chance to work with the car in a very favorable and good way. And we will see, as we said, a growth of volume in 2024, which is, I think, a very nice differentiator from a lot of others. And of course, that is due to the fact that we invested in this product portfolio is coming alive, and three and four join us, and we can enjoy that kind of volume growth purely because we now have these three cars in our toolbox. I think it's fair to that one.

Yes.

The event just in front of Beijing Motor show in April.

Come coming to launch so that element is actually going to be deployed only in the very near future. So I think then this smart device aspect of the postal for having this full integration of its own phone will be much more tangible and that experience is still to come so we definitely.

We see this market now building up they have to do a lot of work in terms of building out the network. So the JV is very busy in la.

<unk> launching the product launching the phone.

And of course investing in building into the.

Sales network of close on China buffer plus the first reaction of Journal Center people, who drove the car very positive.

Thomas Ingenlath: I think it's also very interesting to see that when we now launch the new cars, Polestar 2 interest also starts to pick up. We saw when we launched Polestar 4 here in Europe on our website and on our configurators, and people were putting in orders for Polestar 4. We definitely saw more interest in the Polestar 2 with test drives and all the picking up and so on. So we expect the Polestar 2 to benefit from the launch of the other cars because more people will just see that Polestar is a very nice brand. Thank you very much, Helene.

Great. Thanks, everyone.

Thank you.

Now well go and take our next question.

Just give us some minutes.

And the next question comes from the line of <unk> Tong from Deutsche Bank. Your line is open. Please ask your question.

Hi, Thanks, so much for answering my questions.

I was wondering if you can specifically comment on.

The order pattern on demand environment that you're seeing.

Or put back to.

And given that you know.

A large quantity of volume for this year.

How can we come back yeah go.

And.

Why in the second half.

Anything you can.

Yes, let me comment on.

So that's that one.

Excuse me.

Winnie Dong: And then my second question is on the gross margin guidance you have for the year, reaching double digits by the end of this year and in the high teens in 2025. I guess first on the double digits by the end of this year. I understand the coming on of the higher margin vehicles is going to help with that. Is there any other driver, maybe on the cost side, that you can also explain that, you know, helps you get there at the end of this year and into next year? No, no, that's a good question.

We didn't understand here nobody in the room, which pattern, we just couldn't hear it probably needs in the quarterly phasing is that were you asking.

Sure just eat the demand environment for that vehicle and order trends to that to that vehicle.

Post the two poster too right yes.

Okay.

Well.

Plus that is good and we have obviously now this year falls.

Full year of.

Hum.

The upgraded pasta too.

And what we see is that.

It's equally working on one hand, the long long range that we have.

<unk> with the rear wheel drive.

Very positive reception for that but at the same time and especially since we made this now a very competitive offer.

Per Ansgar: Obviously, SUVs generally have higher gross margins than other cars, so it's like that is one of the main drivers, but we also have worked quite a lot with how the revenue, how we package the cars in terms of options and packaging, so that will improve our revenue. We are also working very hard on the product cost, which will also support the other things, which is also very important going into our sales and marketing strategies. Like, we are also working very hard to really find what I call the right sales channel to really make sure that we sell cars where the most profitable customers are existing. So all of these three things will add to it. And the fourth thing we should really put into that equation as well is the start of production of Pulsar 3 in Charleston. Let's face it, being in the US, producing for the US, of course, gives Pulsar 3 as well a completely different base when it comes to duties and stuff. Good factor. Thank you very much.

Like Okay, either you take the range.

Longer than the rear wheel or you go for the higher performance in the four wheel drive and that's something that is finding great interest.

But I would love to emphasize as well one thing obviously in 2023, our company Postop was very dependent on that one car and we were very.

Much interested in selling a very high number of posts to which of course in a difficult environment in Australia being very careful about the margins.

Let us too.

Tuition, which was volume buys of course always a bit tricky that's totally different in 2024, we have a year.

<unk>, which is a bit split between first half biased.

Hancock company's second half free cash, obviously, but as opposed to three and four joining over the course of this year.

The the volume propulsion that the poster two has to taken our holistic sales is.

Winnie Dong: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad. Now we'll go and take our next question. And the next question comes from the line of Itai Mikaeli from SITI. Your line is open.

It's less than what the car had to perform in 2023, so that gives us of course a much.

Greater chance to to work with the car and in a very favorable and good way. So we will see as we said a growth of volume in 2024, which is I think.

Itai Mikaeli: Please ask your question. Great, thank you. Hi everyone.

Itai Mikaeli: I just actually want to follow up on the gross margin question. I was hoping you could maybe provide a little bit more detail on kind of what you're assuming for your kind of general EV pricing by the end of the year versus now, as well as roughly what kind of sales mix you're assuming across the portfolio, you know, percent of Polestar 3 and Polestar 4, perhaps, as well as roughly if you can share any kind of high-level thoughts on the regional mix that you're assuming. Take I can start a little bit on that one, but obviously, we talked about Polestar 2, they are kind of like... being there on similar levels through the year, and then we add on Polestar 3 and Polestar 4. They have, of course, significantly higher mixes, so that will definitely help, and Yeah, I would say that, of course, if you have the same level of Polestar 2s, you will see that the increased volumes will then basically be done on Polestar 3 and Polestar 4.

Very nice differentiator to a lot of us.

And of course that is due to the fact that we.

<unk> invested and that this product portfolio is coming alive in three and four Julien and we can.

Enjoy that kind of volume growth purely because we have now.

This this free cost and in our toolbox.

I think it to add to that one I think it's also very interesting to see that when we now launched the new cars. The interests of post us to also starts to pick up we saw when we launched wholesale for air in Europe on our website and on our coffee graders and people were putting in order to support so forth.

This or more interest in the pumps, there to with test drives and order picking up and so on so we expect the poster two to benefit from the launch of the other cost because more people will see that <unk> story is a very nice brand.

Yeah.

Thank you very much for that and then my second question is on.

The gross margin.

External guidance you have for the year, reaching double digits by the end of this year and in high teens.

In 2025.

I guess first on the double digit towards the end of this year.

I understand the you know coming on of the hiring.

The vehicle is going to help with that is there any other drivers move on our part.

Thank you that helps you get there.

See you next year.

Per Ansgar: From a regional mix, we see that we didn't really sell a lot of cars last year in China, so that will be a pickup. My view is that Europe will be a very important market and also the US, and especially, as Thomas said, when we start to produce Polestar 3 in Charleston, that is a really good call for the US market and being produced in Charleston with no duties, etc. That will be a significant improvement in our gross margins and mixes. We have for 2025 that makes the number of 40-30-30 in mind, which is Europe 40-30, the U.S. 30, China, and 2024 will be the transition year toward that. When we come from a situation in 2023 where obviously Europe was an overwhelming portion, China very, very little, and then the U.S. there, that's a constant 30 percent. So it's a transition year where we go towards this 40-30 set. Terrific. That's all I have.

No no that's a good question obviously.

<unk> generally have higher gross margins than other causes like that is one of the main driver, but we also booked quite a lost dog with how the revenue how we package. The course in terms of options and packs is that does that that will improve our revenue.

Working very hard on the product cost. So that will also support the other thing which is also very important going into our sales and marketing strategy is working.

We're working very hard to really find what I call. The right sales yen is to really make sure that we sell cars, where they are most profitable customers.

Our existing so all of these three things will add to it and if all the thing again.

Yes that totally.

You should really put into that equation as well the startup production of postal franchise, and let's face it being in the U S producing sort of yes of course gifts the parcel freeze where a complete different base.

When it comes to Judy's and stuff like that have caused us.

What factor.

Thank you very much.

Thank you.

Yeah participants as a reminder, if you wish to ask a question. Please press star one bond on the telephone keypad.

Itai Mikaeli: Thank you. That's very helpful. Thank you. Now we're going to take our next question, and the next question comes from the line of Dan Levy from Buckley. If your line is open, please ask your question. Hi. Good afternoon.

Now, we'll go and take our next question.

And the next question comes from the line of <unk> from Citi. Your line is open. Please ask your question.

Great. Thank you hi, everyone.

Dan Meir Levy: Thank you. Thank you for taking the questions. I wanted to follow up, and I think you made comments earlier. Perhaps you could comment on the expected channel mix in 2024? Obviously, you've been a little more reliant on the Fleet Channel in 2023. I think you gave some media comments that you'd reduce that reliance. Maybe you could just comment on channel mix in 2024, mostly for Polestar 2, but any comments, you know, on dynamics for three or four as well. Yeah, no, thanks.

Do you want to follow up on the gross margin question I was hoping you could maybe provide a little bit more detail on kind of what you're assuming for your kind of general EV pricing by the end of the year versus now as well as.

Roughly what kind of sales mix youre seeing across the portfolio.

Pollstar, three and Pollstar for perhaps as well as roughly if you can share any kind of high level thoughts on the regional mix.

Cut out that you were assuming to get there.

I can start a little bit on that one, but obviously, we talked about polestar two that they are kind of like.

And being their own similar levels through the year and then we add on.

The poster three and post op force they have of course significant yeah. It makes it so that will definitely help.

And.

Per Ansgar: Thanks for that question. Obviously, We have been from time to time dependent on larger fleet sales. That is a position where we are moving away from, as I said; we're improving our sales channel mix. We expect now when we launch cars in the US, Polestar 3 and later on also Polestar 4, which are very good for the US market, they will get a lot of customers in the lease channel, which is the normal way to sell cars in the US, which we think is a good margin. In Europe, you have completely different setups.

Yeah, I would say that of course, if you guys see same level of post the tools you would see that the increased volumes that will basically be done on the post the three airports so forth obviously.

From the regional banks.

We see that that we don't really have a lot of sales last year in China. So that will be a pick up my view is that Europe will be an important market and also the U S and especially US two months that when we start to produce posted three in Charleston.

That is a really good car for the U S market being produced in Charleston, with no duties et cetera that will be a significantly.

Significant improvement on our gross margins that makes it.

You have for 2025 debt mix.

Per Ansgar: We have put in a lot more focus to really get to what we call smaller fleets, like small companies or medium-sized companies, where we sell 3, 4, 5, 10, 20 cars, because that's where we can really get good margins on those customers. That has been a clear effort, especially in the European region, to get into that sales channel in a more clear way. Okay, and as far as the mix into company fleets, which is a little different from something like rental cars. How does the profitability of sales into company fleets compare to retail? Not bad at all.

<unk> 40, 30 30 in mind with this Europe, 40, 30, USA to China, and 2024 will be the transition year to us at <unk>.

When we come from a situation in 2020 free, but obviously Europe was the overwhelming.

Portion.

China, very very little and then U S deaths.

This constant 30% so it's a.

A transition year, where we'd go towards this 40 30 30.

Perfect. That's it all right. Thank you very helpful.

Thank you.

Now we're going to take our next question.

And the next question comes from the line of Dan Levy from Barclays. Your line is open. Please ask your question.

Hi, good afternoon. Thank you thank.

Thank you for taking the questions.

Wanted to follow up and I think you made comments earlier, perhaps you could comment on the expected channel mix in.

Thomas Ingenlath: I mean, it's very important that you make that difference because, indeed, this is actually a very healthy and good business. So we have, I think, invested a lot of effort and manpower in actually establishing these contracts and being out there and being in a lot of company car schemes because this is a very good and profitable business.

2024, obviously.

You've been a little more reliant on the fleet channel in 2023, I think you gave some media comments that you would reduce reliance and maybe you could just comment on channel mix in 2024.

<unk>.

It mostly for proposed start too, but any comments on.

No.

Dynamics for three or four as well.

Dan Meir Levy: That's where I think the strength of Polestar in Europe as well comes from because we have that understanding that a big, big portion of what you think are private customers are actually reached through this company's cost channels and you have to be active and in these have contracts and to be on the radar of these customers. And then maybe we could just follow up with the announcement from Volvo Cars from earlier in the month and, you know, they're refocusing. Perhaps you could just give some parameters on how, if at all, this changes the operational relationship between yourselves and Volvo as far as manufacturing, the platform sharing, and the other resource sharing as well. Yeah,

Yeah.

Yeah no.

Thanks for that question.

Well obviously.

We have been from time to time dependent on on larger fleets as it that that is a position where we are moving away from as I said, we're improving Osage Gen and it makes me expect now when we launch.

Costs in the U S posted three and later on or support staff for which are very good for the U S market. They will get a lot of all of our customers in the lease channel, which is a normal way to sell cars in U S. We think is a good good margins on in Europe Your comps.

The defense adapt we have put in a lot of more focus to really gets to what we call small literally like small companies medium sized companies always L. 345, 10, 20 cars, because that's where we can really get good margins on those customers that has been a clear effort in especially in the European region to get.

Thomas Ingenlath: I mean, I'm always tempted to make a complete distinction between the one thing is with which is how much shares Polestar, Volvo has in Polestar, and on the other end, our contracts, our arm's-length relationship with Volvo when it comes to developing cars, manufacturing cars, and as well as servicing cars. I mean, these are the three major areas where we, on both sides, have the intention to keep it.

<unk> churn is in a more clear way.

Okay, and as far as the mix into.

The company fleet, which is a little different from something like rental car.

Does the profitability of sales into company fleet, how does that compare to retail.

Yeah.

Not bad at all.

I mean, it's very important that you make that difference because indeed this is actually very healthy and good business.

No.

We have.

<unk> invested a lot of effort in.

Manpower and actually establishing these contracts and we hope the NP and a lot a lot of them.

Company car scheme, because this is a very.

Thomas Ingenlath: Flow and continue with that, without any disturbance to the amount of shares that Volvo would have in Polestar. Thomas, strange to think that at the very beginning when we were listing Polestar, it was one of the stories to be told that Volvo's ambition was not to keep forever that big amount of almost the majority of shares of 48%. It was almost a promise to the market to say that Volvo would at some point reduce their ownership and there would be a bigger free float and more other investment possible into Polestar. Now this came maybe from a strange angle when it comes to communication-wise, but it's the same effect.

Good and profitable business so.

That's where I think the strengths of pulse and Europe is where it comes from because we have that.

Understanding that.

A big Big portion of.

What do you think of some private customers actually reached through this company cost channels and you have to be active in this half contracts tend to be on the radar for these customers.

Understood and then maybe we could just follow up with the announcement from our Volvo car.

From earlier in the month.

And they're they're refocusing.

Perhaps you could just give some parameters.

How if at all the changes.

Operational relationship.

Between yourselves and Volvo as far as the manufacturing.

Thomas Ingenlath: Our company growing up and opening the opportunity for other investors to invest in Polestar is one thing. Our relation when it comes to working together operationally with Volvo is untouched by that, and we come from our regular alignment meeting where we go through our contractual business and stuff. This is, of course, something which will completely continue. And we have to give that confirmation to each and every one of our business partners, our customers. This is, of course, something which they can build on, and we can build on. And the business, important for Volvo, they can build on having the revenue of servicing our cars, manufacturing our cars, and when it comes from time to time, engineering our cars. We have already before had, of course, as well, other relationships.

Platform sharing any other resource sharing as well thank you.

Yeah.

Yes.

I'm almost tempted to make a complete.

Distinction between the one thing is with just how much how much SaaS pollstar.

Volvo has been pulsar and on the other end our contracts or arm's length relationship with Volvo when it comes to <unk>.

Developing cost.

Manufacturing costs and this was servicing costs I mean these are the three major areas, where we of course.

Hum.

Sure.

On both sides.

The intention to keep it.

Flowing and continue with that.

Without any disturbance of the.

Amount of chefs that volatile with half in pulsar I mean, there's.

It's almost <unk>.

Strange to think in the very beginning when we were listing posted was one of the stories to be told that Volvo.

<unk> ambition is not to keep forever that big amount of almost majority of SaaS or 48%. It was almost a promise to the market to say that Volvo at some point, what would you say ownership and there would be big a free float and more other investment.

Thomas Ingenlath: We have a Polestar 4 being produced in a Renault factory in Busan, and we have, of course, a big, big benefit of participating in the tech and innovation that's happening there within Geely. And I think we would be very falsely advised if we did not embrace the speed and the power that there is on that side when it comes to electric technology and software and stuff. So that type of diversification of our relationships with other parties, not only doing things together with Volvo but using a bit the broader Geely group. I think that's absolutely a good and healthy and beneficial development for Polestar. I think it's important to add also that the cooperation with Volvo, which is very close, doesn't stop here.

Possible into Pollstar now this came maybe from a strange angled funnel. It comes to communication lives, but if it's the same effect our company growing up opening.

For other investors the opportunity to invest into posed to us one thing our relation when it comes to working together operationally.

With Volvo.

Untouched off that and we.

Just come from our regular.

Alignment meeting that we go through our contractual business and stuff. This is of course something thats.

Completely continue and we have to give that confirmation to each and every of our business partners.

Customers.

This is of course, something which they can build up where we can build the business as well as important for Volvo. They can build on having the revenue of servicing our low cost manufacturing our cost and then it comes from time to time engineering our cost.

Thomas Ingenlath: We, as Tobias said, had our alignment meeting earlier today. We discussed some of the future steps in the development of the cars, future modular upgrades, and so on. But we're also talking more distinctly about what are the next steps in our commercial operations. Can we work together in some markets, in the retailing network, in some of the retail outlets in Fort Resetta. So it's a continuous dialogue. It does not stop at all.

Have already before.

Of course, there's a lot of the relationships we have a poster for being produced in our Reno factory in both sensor and we have Oh of course big Big benefit.

Participating in the Tech and innovation that's happening there was in Chile, and I think we would be very false advised if we would not embrace the speed and the power that there is on that side when it comes to electric technology and software and stuff. So.

Per Ansgar: So from that perspective, no change at all has happened. And let's elaborate on that. I mean, you know that we built our network in Europe and in the US and, even despite the fact it was a direct sales model, we always contacted, reached out to Volvo retailers and invited them to become Polestar investors. I mean, investors in terms of investing into a Polestar space. And that was a very good beginning. It has been successful for both parties.

That type of.

Diversification of our.

Relationships with other parties, not only doing things together with Volvo, but using a bit the broader Gili group.

I think that's absolutely.

A good and healthy and beneficial development for poster I think it's important to add also that that the cooperation with volume, which is very close doesn't stop here. We are two bus had we had a relying in meeting earlier today, we discuss kind of like what are the some of it you just steps of the development of the costs you're modeling.

Upgrades and so on but you're also talking about more.

Thomas Ingenlath: And when we now, with the three cars, with the volume growing, discuss expanding our network, our presentation in the markets, Of course, we do that together with the Volvo dealers. And they are our partners in going further in that. So this is just one example where, hopefully, people will see that this is actually continuing to be a very fruitful cooperation with Volvo. Great, thank you. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad.

Just thinking about what are the next step in our commercial operation that can be both together in in some markets in the retail in that working in some of them being important is that there. So it is a continuous dialogues. He does not stop that also from that perspective no change at all.

And let's leverage on that I mean, you know that we have built our network in Europe in the U S.

Out.

Even despite the fact that it says a lot about pretty always contact it reached out to multiple retailers and invite them to become postop investors and investors in terms of investing into a postal space and that was a very good beginning it has.

Operator: And now we're going to take our next question, and the question comes from the line of Andres Sheppard from Cantor Fitzgerald. Your line is open; please ask your question. Hi, good afternoon, everyone, and thank you for taking our questions. Just wanted to follow up on the capital race. I think we touched on this briefly, but would you mind just reminding us or refreshing us, you know, what is the expected outstanding amount that you'll still need to raise? And how are you thinking about timing for that?

<unk> been successful for both parties and when we know with the precast with volume growing discussed expanding our <unk> network or <unk>.

Presentation in the market of course, we do that together with.

The ball with the lessons they are our partners in.

And going further than that so business, just one example, where hopefully people see that business.

Actually.

Turning to be a very fruitful cooperation with small level.

Great. Thank you.

Thank you.

Yeah participants as a reminder, if you wish to ask a question. Please press star one one on your telephone keypad.

And now I'll go and take our next question.

Andres Juan Sheppard: I know we touched on equity, but I'm just curious about the timing and curious about the incremental now that you think you'll need to fulfill. Thank you. And we're very happy to come back to this very important point today, because let's face it, I mean, that is for us a very important moment where we cover the 1.3 billion that we have as the funding until we have cash flow break even, that we have covered 1 billion of that. Okay, to be precise, 950 million. You can do the math, figure out what's left, and pack an answer. Maybe all you think about is handling the rest. No, and, of course, there are different angles to that one.

And the question comes from the line of Andrew Shepherds from Cantor Fitzgerald. Your line is open. Please ask your question.

Hi, good afternoon, everyone and thank you for taking our questions.

Just wanted to follow up on the capital raise.

I think we touched on this briefly but would you mind, just reminding us or refreshing is what is the.

Expected are outstanding.

There youll need to raise still and how are you thinking about timing for that I know, we touched on equity, but just curious on the timing and curious on the incremental amount that you think you'll need to fulfill thank you.

And we're very happy to come back to this very important point today, because let's face. It I mean that is the awesome very important Beaumont, where we cover off the $1 3 billion that we have has the funding need to be cash flow breakeven that we have come up 1 billion of debt okay to be precise.

Thomas Ingenlath: Of course, we are looking through all the time, trying to see if we can improve our cash flow, limit our investment, et cetera, to make sure that we are even limiting this gap. Having said that, though, as I said before, as the CFO, I would like to have more equity in the company because, over time, we need to have a different structure with the balance sheet. So again, as we see the opportunity, we will take that and try to do some equity raising here, both to make sure that we don't have this remaining need and also to strengthen our balance sheet. I would love to pick one thing up here, and that is, of course, the question about the 1.3. We have one of 1.3 covered, and then The elephant in the room, yeah, okay, but this is 1.3 real.

$950 million so.

You can do the math whats left and Pat can answer.

These things about handling the rest no I as and of course that there are these different oh and yes. So that's one of course, we are looking through all the time.

Trying to see can be improved.

Improve our cash flow limit our investments et cetera to make sure that we are even limiting this gap, having said that though as I said before as the CFO I would like to have more equity into the company because we over time, we would need to have a different structure with the balance sheet. So again S.

As we see the opportunity, we will take that and try to do some equity raising here.

To both to make sure that we we don't have these remaining need and also to strengthen our balance sheet.

I would love to pick one thing up here and that is of course.

The.

Question about the 1.3, we have one of 1.3 covered and then.

Okay.

The elephant in the room, yeah, Okay, but this is one through real and I really would love to emphasize how seriously we take that and how much.

Thomas Ingenlath: And I really would love to emphasize how serious we take that and how much when we develop, Sorry, as a company, and when we face the next month ahead, for us, this is an incredible serious and important task. Keep this, maintain that wholeheartedly, that we say, okay, this is the framework which we have, and that's where we work in, with the billions that we invest. They, of course, are invested in good stuff, our product portfolio, the five cars that we will have developed by 2025. And this is very predictable, very predictable costs that we have, very predictable investments, and we know exactly, in 2024, 2025, what is still to be done. Other factors, such as sales volume stuff.

When we develop.

Sorry, as a company and when we face that.

Next month's ahead for US is just an incredible.

Serious and important task to.

Keep this.

<unk> maintained that's wholly that we say okay. This is the frame, which we have and that's what we're working.

And.

Of the 1 billion set we invest it.

Of course, our invested into good stuff our product portfolio. The five costs that we will have.

Undeveloped till 2025 and.

And this is very predictable.

It's very predictable cost behalf.

Predictable investments and we know exactly.

2020 for 2025, what is still to be done.

Yeah.

And the fact, John it.

I mean, the other effect is a sales volume of stuff I mean, yeah of course, there that can fluctuate, but this is stuff that we can handle and which will not create the big black holes out there has talked about so we are very serious and very confident about this 1.3.

Thomas Ingenlath: I mean, yeah, of course, that can fluctuate, but this is stuff that we can handle and which will not create the big black hole that there's talked about. So we are very serious and very confident about this 1.3. Got it. That's super helpful. I appreciate all that color.

Got it that's super helpful. I appreciate all that color and maybe just as a quick follow up.

Andres Juan Sheppard: Maybe just as a quick follow-up with the incremental 15% reduction in the workforce. You know, I know you're not guiding OPEX for gross margins, but I'm curious, you know, how should we be thinking about OPEX and gross margins for 2024 given this reduction in terms of, you know, modeling? Thank you. If you do a little bit of the math, we did 10% last year, which should start to flow through from a head count perspective this year. When we now do 15%, there is obviously a delay in it. It's like some markets or countries you can do it quicker; in Sweden, you need to go through a process with union negotiations and layoffs and so on.

With the incremental 15% reduction in the workforce.

I know, you're not guiding opex or gross margins, but I'm curious to know how should we be thinking about opex and gross margins for 2024, given this reduction in terms of maybe modeling. Thank you.

I, if you do a little bit of a mess, we did 10% last year, which is kind of like starts to flow through from a head count perspective. This year. Let me now do 15%. There is obviously a delay on it its like some markets. What countries you can do it quick Gary in Sweden, you need to get go through like a process with union negotiations.

And layoffs and so on so you will gradually see that come into the year and hence that do we see that the.

Per Ansgar: So you will gradually see that coming to the year, and hence we see that the later part of the year will be significantly stronger than the first half of the year. Got it. Okay. Thank you very much. I'll pass it on.

Later part of the year will be significantly stronger than the first half of the year.

Got it okay. Thank you very much I'll pass it on thank you.

Bojana Flint: Thank you. Thank you. Now I would like to hand over to Bojana Flint for retail shareholders questions. Thank you, Nadia.

Thank you.

Yeah.

Now I would like to hand over to you, but you're on the Flint for retail shareholders questions.

Thank you Lydia and thank you to everyone who has submitted their questions as usual, we're gonna take top rated as a top three volt questions by retail shareholders.

Bojana Flint: And thank you to everyone who has submitted their questions. As usual, we're going to take the top three. These are the top three voted questions by retail shareholders. I'm going to read them out, and then Thomas and Pear will answer them.

I'm gonna be the mountain than Thomson Pavel answer them. So the top question laws.

Thomas Ingenlath: So the top question was... Share prices continue to be catastrophic. Despite Polestar 4's launch and strong TV advertising, there appears little hope for improvement. I'm sure this concern is shared by fellow investors. Please explain the causes and define a convincing plan for recovery.

Sure prices continued to be catastrophic despite post our full launch and strong TV advertising there appears a little high for improvement I'm sure. This Cassandra Shedd My fellow investors. Please explain the causes and define a convincing plan for recovery.

Thomas Ingenlath: Thomas, would you like to start? Yeah, right. I'll take this one. Obviously, we strongly believe that our shares are undervalued. And whenever we talk about it, we try to find out. It is, of course, the very big thing was always the overhang with our question mark behind the funding, and It's just rarely that we had a question about, you know, our brand. It was so many people who love our brand who love our cars. There's always a question about funding, but not funding. Now, I think that, of course. As much as it's important for us to have the money for the remaining investment, it's also an incredibly important moment in order to give that opportunity for our share price to develop because that big question mark is gone. Then we have... The other effect, free float, was another thing that the free float, of course, is not sufficiently big.

Thomas would you like to start.

Yeah, right that take this one off.

Obviously, we strongly believe that Oh shares are undervalued and when ever be.

Talk about to try to find out it is of course, the very big thing was always the overhang massawa.

Mark behind the funding.

Yeah.

And.

This rally that we had a question about you know our brand because so many people love our brand who love our cost is always the question about but the funding, but the funding now I think that is of course.

That's as much as it's important for us to have the money for the for the remaining investment as well an incredible important moment in order to give that opportunity if our share price to develop because that's a big question Mark is gone.

And then we have.

The other effect free float was another thing that the free float of course.

Yes.

Not sufficiently pick this will be 6% plus for our free float. So we end up of Costless at the end of the day at 80% free float, which has a much healthier figure than we had before so that should of course.

Thomas Ingenlath: This will be a 6% plus for our free float. So we end up, of course, with, at the end of the day, an 80% free float, which is a much healthier figure than we had before. So that should, of course, help us out well and be a big game changer. Yeah, um... That's them.

Help us well and be a big game changer.

Yeah.

That's fine.

Bojana Flint: My answers for this one. Okay, great. The second question is, with recent changes in funding, do you think the previous statement of making a profit by 2025 is still achievable? And I think, Per, we talked about you maybe answering this, but profit, we have always guided to cash flow break even. So our answer is going to land on that. No, that's correct.

The answer is for this one.

Okay great.

Second question is with recent changes in funding do you think the previous statement of making a profit by 20 to 25 is still achievable and I think Pat we talked about you may be honest I mean, the spot prophage, we have always guided to cash flow breakeven say I'll answer is going to land on that no.

Correct things you'll be on.

Bojana Flint: Thank you, Bojana. What we said in our press releases and what we talked about today here is that we are really confident of achieving our 2025 targets on our volume guidance and on our gross margin targets. And basically, what we are also saying is that with the launch of Polestar 3, Polestar 4 coming into production firstly and then starting to be sold and hitting the roads during the second half of this year, we see that the gross margin and the volume will pick up very nicely. So, leaving this year, we will more or less be on the trajectory to meet the 2025 targets. So we are confident of meeting the vet.

What we said in our press releases that you talked about today here is really that.

We are confident on achieving our 10 to 25 targets on our volume guidance and on our gross margin targets and basically what we're also saying is that we the launch over the course of three posted four coming into production Firstly and then stop.

<unk> to be sold and hitting the roads during the second half of this year.

We see that the gross margin and the volume will pick up very nicely. So, leaving this year would be more or less be on the trajectory to meet you tend to 'twenty five targets. So we are.

Confident or meeting that.

Cash flow breakeven for 2025.

Great. Thank you and then the third question is.

Per Ansgar: Cash Flow Breakeven for 2025. What's the future of Polestar after Volvo exited as a partner? It's not an exit, and nothing changes. No, again, just to clarify, it's still our strategic partner. It's not an exit.

What's the future of pulse after vulva exited as a partner.

We have already had that earlier so.

It's not an exit and nothing changes.

No I tried to clarify it.

But it's still our strategic partner, it's not an exit.

Bojana Flint: Close collaboration continues. Um, So I just use the time now and to extend and go back again to the share price. Okay. The two things that I said are one thing, but there's, of course, another thing.

Close collaborations continue.

I thought I'd just use the time now to extend.

Go go again back to the share price okay.

Two things that I said, that's one thing, but there's of course another thing 2024.

Thomas Ingenlath: 2024, back to it. We will have the expansion of our product portfolio. We have two high-margin SUVs joining at a time when it's very difficult for anybody to achieve.

Back to it we will have the X 10, some of our product portfolio. We have two high margin Suvs joining in the time, where it's very difficult for anybody to achieve we will achieve volume growth, we will achieve margin growth I mean.

Thomas Ingenlath: We will achieve volume growth. We will achieve margin growth, too. I mean, that year will simply be much, much more of a proof point of the asset-light model that we have been promoting for such a long time. So I think time will tell. I think that the time has come, 2024, for it to become that much more apparent in our figures, in our financials, readable what kind of good company we are building here. So I hope that that will, of course, attract. Um, people to buy our stuff.

That you will just simply be much much more of a proof point.

The asset light model that we have been promoting some quite such a long time, so I think.

Time time will tell I think that time has come 2024.

<unk> that much more as well in our in our figures in our financials readable.

What kind of.

Good company, we are building him. So I hope that that will of course attract.

People to buy our shares.

Bojana Flint: Perfect. And with that, we are done. Thank you very much to everyone who's joined the call, both on the call and the webcast. And we're always here with any additional questions that you might have. Thanks a lot. Thank you very much for taking the time.

Perfect and with this we have done. Thank you very much everyone who's joined the call by some of the call and the webcast.

We're always here, but any additional questions that you might have.

Thanks, a lot. Thank you very much for taking the time.