Q3 2025 Polestar Automotive Holding UK PLC Earnings Call

[Company Representative] (Polestar): Polestar's select results for the Q3 and first 9 months of 2025. I'm joined by Michael Lohscheller, Polestar CEO, and Jean-François Mady, Polestar CFO, who will comment on the performance. Then we will open the floor to analysts' questions. Before we start, I would like to remind participants that many of our comments today will be considered forward-looking statements under the US Federal Securities laws and are subject to numerous risks and uncertainties that may cause Polestar's actual results to differ materially from what has been communicated. These forward-looking statements include, but are not limited to, statements regarding the future financial performance of the company, production and delivery volumes, financial and operating results, near-term outlook and medium-term targets, fundraising and funding requirements, macroeconomic and industry trends, company initiatives, and other future events.

First nine months of 20 to 25.

I'm joined by Michael loss Sheila bolster.

Both the CEO and shrunk from somebody pulls the CFO, who will comment on the performance and then we will open the floor to analysts' questions.

Before we start I would like to remind participants that many of our comments today will be considered forward looking statements under the U S. Federal securities laws and are subject to numerous risks and uncertainties that may cause <unk> actual results to differ materially from what has been communicated this forward looks.

Statements include but are not limited to statements regarding the future financial performance of the company production and delivery volumes financial and operating results near term outlook on medium term targets fundraising and funding requirements macroeconomic and industry trends company.

You should gifts and other future events.

Forward looking statements made today I effective only as of today and post 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.

[Company Representative] (Polestar): 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. In addition, management may make references to non-GAAP financial measures during the call. A discussion of why we use non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measure can be found in the appendix of the press release and in the Form 6-K published today. Now I will hand over to Michael.

In addition management may make references to non-GAAP financial measures during the call.

A discussion of why we use non-GAAP financial measures and the reconciliation to the most directly comparable GAAP measure can be found in the appendix of the press release and in the form 6K published today now I will hand over to Michael.

Hello, everyone and thank you for joining us today.

Michael Lohscheller: Hello, everyone, thank you for joining us today. Our focus in Q3 has been delivering on our strategic plans, transforming our commercial operations, increasing our retail footprint, and improving our operational efficiency. We are making significant progress across all three of these areas in the face of a very challenging economic environment. 9 months into the year, I am particularly pleased with the progress of our commercial transformation. Compared to last year, we have increased the number of sales points, excluding China, by 54% to 192. Combined with a more active sales model, this is an important part of the foundation for our volume growth of 36% in the first 9 months of the year. The pace of retail expansion remains high.

Our focus in the last quarter has been delivering on our strategic plans transforming our commercial operations, increasing our retail footprint and improving our operational efficiency.

We are making significant progress across all three of these areas.

In the face of a very challenging economic environment.

Nine months into the year I'm, particularly pleased with the progress of our commercial transformation.

Compared to last year, we have increased the number of sales points, excluding China by 54% to 192.

Combined with a more active search model. This is an important part of the foundation for our volume growth of 36% in the first nine months of the year.

The pace of retail expansion remains high and in the month of October alone. We have opened nine new sales points across Australia, Denmark, Sweden, Germany, the UK and the Netherlands.

Michael Lohscheller: In the month of October alone, we have opened 9 new sales points across Australia, Denmark, Sweden, Germany, the UK, and the Netherlands. 5 of these are new openings. 4 of them are strategic moves away from smaller boutique-style city center locations to larger out-of-town locations, making it easier for more people to test drive and buy a Polestar. Our expansion in France is also proceeding as planned. Retail sales in Q3 grew by 13% versus the same quarter last year and by 36% for the first 9 months of the year. Revenue grew by 36% in Q3 and by 49% in the first 9 months. Europe remains our main market, representing over 75% of our global deliveries. Our most important European markets delivered strong year-on-year growth during the first 9 months.

Five of these are new openings four of them are strategic moves away from smaller boutique start city center locations to larger out of town locations, making it easier for more people to test drive and buy a port stuff.

Our expansion in France is also proceeding as planned.

Retail sales in the third quarter grew by 13% versus the same quarter last year.

By 36% for the first nine months of the year.

Revenue grew by 36% in the third quarter and by 49% in the first nine months.

Europe remains our main market representing over 75% of our global deliveries.

Our most important European markets delivered strong year on year growth during the first nine months.

Belgium, and the Netherlands grew by 40% and 37% respectively.

Michael Lohscheller: Belgium and the Netherlands grew by 40% and 37% respectively. Germany grew by 46%. Norway grew by 63%. Sweden grew by 41%, and the UK grew by 100%. Korea remains our strongest performing market in Asia, with growth of 430%. At the start of the year, we announced a shift in platform strategy. Moving forward, we will utilize group technology platforms for future models, giving us access to the best EV technology available in the fastest and most efficient manner. The restructuring and refocusing of our R&D operations that this enables started during Q2 and has continued into the latter part of the year. Last month, we announced further staff reduction of around 230 roles.

Germany grew by 46%, Norway grew by 63%, Sweden grew by 41% in the UK grew by 100%.

Korea remains our strongest performing market in Asia with growth of 430%.

At the start of the year, we announced a shift in platform strategy.

Moving forward, we will utilize group technology platforms for future models.

Amerigas excess to the best <unk> technology available in the fastest and most efficient manner.

The restructuring and refocusing of our R&D operations that this enables started during the second quarter and has continued into the latter part of the year.

Last month, we announced further staff reduction of around 230 rows.

We will continue to optimize the structure of our operations and expect to end the year at approximately 2000 employees.

Michael Lohscheller: We will continue to optimize the structure of our operations and expect to end the year at approximately 2,000 employees, down from 2,500 at the start of the year, a reduction of 20%. This process will continue as we take steps to protect our business in the face of industry headwinds. Last week saw the start of sales of Polestar 4 in North America, with media continuing to give this incredible car high praise for its performance, design, and technology. The Polestar 4s that are set to be delivered to customers starting in Canada are the first Polestar 4s manufactured at the Busan South Korean factory, making this car even more competitive on the North American market. Having spent last week with our dealers from Canada and the US, I'm very excited about the prospects for this SUV coupe in the 2 very important markets.

One from 2500 at the start of the year a reduction of 20%.

This process will continue as we take steps to protect our business in the face of industry headwinds.

Last week saw the start of sales of Pollstar for in North America.

With media continuing to give this incredible car high praise for its performance design and technology.

The poster force that are set to be delivered to customers. Starting in Canada are the first poster force manufacturing at the Bousada South Korean factory, making this even more competitive on the North American market.

Having spent last week with our dealers from Canada, and the U S. I'm very excited about the prospects for this SUV coupe and the two very important markets.

Our full focus is on ending the year in a strong way and we expect to provide guidance in the beginning of 2026.

Jean-François Mady: Our full focus is on ending the year in a strong way, and we expect to provide guidance in the beginning of 2026. With that, I'll end my opening remarks and hand over to Jean-François. Thank you, Michael. Good morning, good afternoon, everyone. With continued growth in retail sale volume and revenue year on year, the financial result for Q3 and the first 9 months of 2025 demonstrates strong commercial performance at the top line. Significant external headwinds, notably tariff and pricing pressure, continue to impact profitability, including in Q3. Looking at the financial results for the first 9 months of 2025, retail sale volume, as pre-announced, increased by 36% to over 44,000 cars. Polestar 3 and Polestar 4 made up 65% of the retail sale.

With that I'll end, my opening remarks, and hand over to Jean Francois.

Thank you Mike Good morning, Good afternoon, everyone with continued growth in retail sales volume and revenue year on year, the financial results for the third quarter and the first nine months of 2025 demonstrates strong commercial performance at the top line.

However, significant external headwinds, notably tariff and pricing pressure.

Continue to impact profitability, including in the third quarter.

Looking at the financial results for the first nine months of 2025.

Retail sales volume as peanuts increased by 36% to over 44000 jobs.

First our free ample thoughtful made up 65% of the retail side.

By geography, we continue to see particularly strong performance in Europe as mentioned by Michael.

Jean-François Mady: By geography, we continue to see particularly strong performance in Europe, as mentioned by Michael, notably in the UK, Germany, Belgium, the Netherlands, and across the Nordic region. Also in APAC, led by South Korea. The US market remained challenging as tariff and policy changes continue to impact profitability. We need to do more on localization of parts and components to be efficient. The US represented 8% of our retail sale for the first 9 months of 2025 from 16% in 2024. We operate in 28 countries worldwide, including now in France, launched in June. Our commercial transformation is progressing at pace with another 11 new retail partners signed up in Q3 2025, bringing the total to 141 active retail partners at the end of September, contributing to the development of our sale points.

Notably in the UK, Germany, Belgium, the Netherlands.

And across the Nordic region, but also in netback led by South Korea.

The U S market remains challenging our storage and policy changes continue to impact profitability.

And we need to do more on localization of path and component to be efficient.

The U S represented 8% of our retail sales for the first nine months of 2025.

16% in 2024.

We operate in 28 countries worldwide, including now enhance lunch in June.

Our commercial transformation is progressing at pace with another 11, new retail partners sign up in the third quarter of 2025, bringing the total to 141 active retail partners at the end of September.

Contributing to the development of our cell phones.

As a result revenue grew by 49% to about $2 2 billion U S. Dollar in the first nine months of 2025.

Jean-François Mady: As a result, revenue grew by 49% to about $2.2 billion in the first 9 months of 2025. The drivers were, first, higher sale volume and a growing share of higher price model, Polestar 3 and Polestar 4, in the sale mix. Second, carbon credit sale amounted to $104 million under the new EU pooling agreement versus sale of below $1 million for the same period in 2024. Another $19 million is booked in other operating income. In this context, we have already hit our target of a three-digit million-dollar amount to be delivered this year. At the same time, pressure on pricing continues to grow due to the challenging market condition, and we incur costs related to the residual value guarantee in the North American markets.

The drivers, where first higher sales volume and a growing share of higher price model Paul stuff for example, stoffel in the sales mix.

Second Cabot.

Kelvin <unk> sale amounted to $104 million.

Under the new EU pooling agreement versus sale of below $1 million for the same period in 2024.

Another 19 million is booked in other operating income.

In this context, we have already hit our targets.

The three digit million dollar amount to be delivered this year.

At the same time pressure on pricing continues to grow due to the challenging market condition, and we incur costs related to the residual value guarantee in the North American markets.

The adjusted gross margin improved by <unk>, three percentage points to a negative one 8%.

Jean-François Mady: The adjusted gross margin improved by 0.3 percentage points to a -1.8%. The evolving product and geographical sale mix and growing carbon credit sale supported the improvement of adjusted gross margin. Continuous reduction of cost of material, including for batteries, allows us to mitigate partially higher lending costs. External headwinds, pressure on pricing, and current tariffs were still significant. In this period, adjustment of inventory to net realizable value and expenses related to residual value guarantee further impacted negatively Polestar's profitability. Selling, general, and administrative expense, excluding the sale agency remuneration, continued to decrease at the pace indicated in H1 2025. The reduction reflect optimized marketing and advertising costs and lower general and administrative costs resulting from cost discipline and organizational restructuring.

The evolving product and geographical sales mix and growing carbon credit sale.

Reported improvement of adjusted gross margin.

Moreover, continuous reduction of cost of material including for batteries.

To mitigate partially higher lending costs.

External headwinds pressure on pricing and current tariffs were still significant.

In this period adjustment of inventory to net stable value and expenses related to residual value guarantee southern impacted negatively staff profitability.

Yeah.

Selling general and administrative expense, excluding the sale agency remuneration continue to decrease at the pace indicated in the first half of 2025.

The reduction reflects optimize marketing and advertising cost.

And lower general and administrative costs, resulting from cost discipline and organizational restructuring.

We are also reducing head count predominantly in our research and development as.

Jean-François Mady: We are also reducing headcounts predominantly in research and development as we have begun to implement our previously announced strategy to make better use of existing architecture from our partners, specifically Geely Group, for future Polestar model, as commented by Michael. Adjusted EBITDA loss of $561 million improved by 8%, reflecting first fixed cost reduction due to optimized marketing spend and a lower headcount. Second, carbon credit income. Third, positive foreign exchange impact. These positive elements were partially offset by slightly higher adjusted gross loss and higher sale agency remuneration linked to growing sale volume. Briefly touching on the reported figures, gross margin of -34% and net loss of $1.6 billion primarily reflect the impairment expense of $739 million for Polestar 3 booked in Q2 2025.

As we have begun to implement our previously announced strategy.

To make better use of existing architecture from our partners, specifically Gd group.

Future Pollstar model as commented by nature.

Adjusted EBITDA loss of $561 million improved by 8% left.

Thanks for taking first fix cost reduction due to optimize marketing spend and the lower head count second Cabot credit income.

Third positive foreign exchange impact.

These positive elements were partially offset by slightly higher adjusted gross loss.

And how you sell agency remuneration linked to growing sales volume.

Briefly touching on the reported figures.

Gross margin of negative 34%.

And net loss of one 6 billion U S dollar.

Primarily reflect the impairment expense of $739 million for per stuffy book in the second quarter of 2025.

Now turning to the results for the third quarter of 2025.

Jean-François Mady: Turning to the results for Q3 2025. Retail sale grew by 13% year on year to over 14,000 cars sold. Revenue increased 36% to $748 million. Driven mainly by higher volume, higher price Polestar 3 and Polestar 4 model in the mix, and carbon credit sale. This was partially offset by pressure on pricing and residual value guarantee adjustment related to the North American market. Revenue from sale of carbon credit sale was $32 million in the quarter from nil in 2024. Gross margin at -6%, a deterioration of 5 percentage points was a result of, first, pressure on pricing. Second, tariff. Third, adverse mix effect from sale of Polestar 2 and Polestar 3, specifically the sale of Polestar 3 in the US.

Retail sales grew by 13% year on year to over 14000 carats sold.

Revenue increased 36% to $748 million drill.

Driven mainly by higher volume higher price per stop free unfolds suffer model in the mix and carbon credit site.

This was partially offset by pressure on pricing and the residual value guarantee adjustments related to the north American market.

Revenue from sale of carbon credit sale was $32 million in the quarter from nil in 2024.

Gross margin at negative 6% deterioration of five percentage points was a result of first press.

Pressure on pricing.

Salaries.

Third adverse effect from sale of per start to enforce Duffy specifically the sale of pasta free in the U S. Finally.

Finally.

Inventory was adjusted to net tangible value.

Jean-François Mady: Finally, inventory was adjusted to net realizable value, we incur expenses related to residual value guarantees in the North American market. Net loss was $365 million in Q3. Adjusted EBITDA loss of -$269 million increased year on year, mainly because of higher gross loss, higher sale agency remuneration, and negative foreign exchange impact were only partially compensated by reduction of SG&A expenses. On the funding of our operation and liquidity, during the first nine months of this year, we raised $200 million of new equity from PSD Investment Limited, an entity that is controlled by Mr. Li Shufu, founder and chairman of Geely Holding Group. We secure as well about $1 billion worth of new facilities and renewed about $2.2 billion of existing facilities.

And we incurred expenses related to residual value guarantees in the North American market.

Net loss was 365 million in the third quarter.

Adjusted EBITDA loss of $259 million increased year on year, mainly because of higher gross loss higher cell urgency remuneration and negative foreign exchange impacts were only partially compensated by a reduction of SG&A expenses.

Underfunding of our operation and liquidity.

During the first nine months of this year, we raised $200 million of new equity from <unk> investment limited.

The entity that is controlled by Mr. Ethnically Thunder and Sherman Judy holding group.

And we secure as well about $1 billion wolf of new facilities and renewed about two $2 billion of existing facilities.

Our cash position at the end of September was $995 million and pole Star Wars compliance with loan covenants as of 30 September 2025.

Jean-François Mady: Our cash position at the end of September was $995 million, and Polestar was compliant with its loan covenant as of 30 September 2025. With the support from Geely Holding Group, we continue to make progress towards securing new equity and debt funding. Also, we plan to launch a reverse stock split shortly to change the ratio of our American depository shares to ordinary share, which is currently 1 to 1. Detail will be announced separately. To conclude, our priorities remain. First, driving growth through the active selling model and leveraging our attractive model lineup. Second, improving processes, streamlining the organization and operation, looking for further synergies. Third, extracting efficiencies and cutting costs. Last but not least, securing new equity funding. Now, I will hand over back to the operator.

With the support from <unk> group will continue to make progress towards securing new equity and debt funding.

Also we plan to launch a reverse stock split shortly to change the ratio of our American depositary shares to ordinary share which is currently 121.

Details will be announced separately.

To conclude our priorities remain.

First driving growth for the active selling model and leveraging our attractive model lineup.

Second improving processes streamlining the organization and operation looking for further synergies third extracting efficiencies and cutting costs and.

And last but not least <unk>.

Securing new equity funding now.

Now I will hand over back to the operator.

As a reminder to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one and one again, please standby while we compile the Q&A key.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A queue. Our first question comes from the line of Winnie Dong from Deutsche Bank. Please go ahead. Your line is open.

Our first question comes from the line of Winnie Dong from Deutsche Bank. Please go ahead. Your line is open.

I yeah. Thank you so much for taking my questions.

Winnie Dong: Hi. Thank you so much for taking my question. I was wondering if you can help us bridge the walk for gross margin a bit more. You mentioned, you know, geographical sales mix and, you know, reduction of material costs, there's also pressure on pricing. I wonder if you can just give us some, a bit more detail on the gives and takes. Thank you.

I was wondering if you can help us bridge to walk for gross margin a bit more and then Shang geographical sales mix and.

And a reduction of material costs.

But then there's also pressure on pricing until then David can you just give us some.

And then what detailing on puts and takes thank you.

Hi, Whitney.

For your equation so.

Jean-François Mady: Hi, Winnie. Thanks for your question. I think that you want to bridge the work between Q3 gross margin and Q2 gross margin. The result of Q3 has been clearly disappointing for us. First, we are continuing suffering pricing pressure on our vehicle, in addition to have a higher cost of production due to the duties. In addition to that, also we had some adverse mix effect in the sense that we have sold more Polestar 2 and more Polestar 3 than Polestar 4 as expected. Even if at the same time, we have successfully partially compensated part of those negative impacts by continuing reducing product cost reduction, but also reducing fixed cost.

I think that you want to bridge.

The walk between Q3 gross margin on the on Q2 gross margin. So the result of carefree has been clearly disappointing for us. So first we are continuing suffering pricing pressure on our vehicle. In addition to have a higher cost of production due to the duties, but in addition to that also we had.

Some adverse mix effect in a sense that we have sold multiple start to run multiple stops free.

And then post therefore as expected.

Even if at the same time, we have successfully partially compensating part of those negative impact by continuing reducing product cost reduction, but also reducing fixed cost.

On the pulp stuff three adverse mix impact I, just would like to comment that we have realized some tactical sale, especially in the U S. Because it is from where most of this mix negative mix effect is coming from because we took the opportunity of the end of the tax incentive in the U S in order to destock.

Jean-François Mady: On the Polestar 3 adverse mix impact, I just would like to comment that we have realized some tactical sale, especially in the US, because this is from where most of this mix, negative mix effect is coming from. We took the opportunity of the end of the tax incentive in the US in order to destock, I would say, most of the Polestar 3, and this is from where this negative mix impact is mostly coming from.

I would say most of the call suffering and this is familiar this negative mix impact is mostly coming from.

Okay. Thank you so much for the details.

Winnie Dong: Okay. Thank you so much for the details. Second, I was wondering if you can maybe just comment on the OpEx spending trends in the quarter and how we sort of foresee, you know, on a go-forward basis, how that could trend into next year. Thank you.

And then secondly, I was wondering if you can maybe just comment on the opex spending trends in the quarter and how we see.

Firstly on a go forward basis.

Intonation. Thank you yeah. So.

Jean-François Mady: Yeah. I will not comment into the detail about Q3, but as you know, we realized quite significant decrease of our fixed cost, especially at the end of H1 compared to last year, at around -10%. Those decreases are coming, I would say, from two main levels. The first one, this is the optimization of our marketing expenses, which is coming from, I would say, less also production. Also the second level is mainly driven by the reduction of headcounts. We are still marching in consolidating our organization, realizing some efficiencies and synergies. We started the year with 2,500 headcounts, and we still have the objective to reach 2,000 headcounts by the year end. I would say that looking at Q3 and looking at Q4, we want to accelerate on those levels.

We're not committing to the detail about Q3, but as you know so we realized quite significant decrease of our fixed costs, especially at the end of each one compared to last year at around minus 10%. Those decreases are coming I would say from our two main levers. The first one this is the optimization of our mark.

<unk> expenses, which is coming from I would say less or so production, but also the second levers is mainly driven by direction of accounts. So we are still marching in consolidating our organization.

Realizing some efficiencies and synergies we started the year with 2508 counts and we still have the objective to reach 2000 accounts by the year end and I would say that looking at Q3 and looking at Q4, So we want to accelerate on those.

Flavors.

And I think that we have a good momentum entering Q4 now.

Jean-François Mady: I think that we have a good momentum entering Q4 now.

Thank you very much.

Thank you, we'll now move on to our next question.

Winnie Dong: Thank you very much.

Operator: Thank you. We'll now move on to our next question. Our next question comes from the line of Tobias Beith from Rothschild & Co Redburn.

Our next question comes from the line of therapies.

From Rothschild Okay Redburn. Please go ahead your line is open.

Your line of TBA space from Rothschild and correct. Ben is now open. Please go ahead with your question.

Great. Thanks, Thanks for your time.

Tobias Beith: Great. Thanks. Thanks for your time. I have two questions, if I may. I'll ask them separately. Michael, since we spoke last, a bilateral trade agreement has been struck between the EU and the US. On paper, it seems quite helpful for Polestar's unit profits, particularly on the Polestar 3. I wondered if I could hear your thoughts today on how you and the rest of the management team have or may be thinking about adapting your business plan for the next couple of years.

Two questions if I may Alison separately.

Michael since we spoke last a bilateral trade agreement has been struck between.

The EU and the U S.

On paper it seems quite helpful for pulse stylish unit profits, particularly on the pole star three.

Wonder if I could hear your thoughts today on how you and the rest of the management team have or may be thinking about adapting your business plans for the next couple of years.

Sure happy to do that by ASO, let's let's talk a bit more in detail because we have.

Michael Lohscheller: Sure. Happy to do that, Tobias Beith. Let's talk US a bit more in detail because we have a setup where on the one hand, we have the local production in Charleston, where we join the Volvo Cars factory, which I think is a good basis, right? Because we try to localize as much as we can. At the same time, also parts then from Mexico, for example, have duties. It's a good setup, but obviously it's also suffering from duties, right? The other thing for the US business model, which is very important to understand, is that we bring now the Polestar 4 to the US, and we bring it out of South Korea to the US.

Set up where on the one hand, we have the local production in Charleston, where we enjoy in the Volvo factory, which I think is a good basis right because we try to localize as much as we can at the same time also parts and from Mexico. For example have Judy So it's it's a good setup, but obviously is also suffering from from from duties right.

The other thing for the U S business model, which is very important to understand is that we bring the other posted a four to the U S and we bring it out of South Korea to the U S and that I think we feel is a very good setup because that has much lower duty sand from from Europe from China, and as a good basis right, but it's it's a complicated.

Michael Lohscheller: That, I think, or we feel is a very good setup because that has much lower duties than from Europe or from China, and is a good basis, right? It's a complicated world, as you say, because duties change quite a bit. We feel with the local setup in the US and then the South Korean factory, we have a good setup in order to then optimize our US business model. Hope that answers your questions.

Third as you say because duty has changed quite a bit but we feel we're the local setup in the U S. And then the South Korean factory, we have a good set up in order to then.

Optimize our U S business model, so hope that answers your questions.

Yeah.

Maybe just on that what about kind of the opposite way around so.

Tobias Beith: Yeah. Just on that, what about going the opposite way around? There is now an opportunity for you to earn more profits on Polestar 3s exported into Europe.

Yeah.

There is now an opportunity for you to earn.

More profits from pulsar threes exported into Europe.

Yeah that is an opportunity for us as well at the same time, we also have opportunities to produce it in China and obviously once you have invested into the tooling into the setup, it's not that easy to change immediately but as you quite rightly highlight it is an opportunity, which we are also exploring and and might use if it is appropriate for us.

Michael Lohscheller: Yeah. That is an opportunity for us as well. At the same time, we also have opportunities to produce it in China. Obviously, once you have invested into the tooling, into the setup, it's not that easy to change immediately. As you quite rightly highlight, it is an opportunity which we are also exploring and might use if it is appropriate for us.

Okay understood. Thanks, Michael.

Tobias Beith: Okay. Understood. Thanks, Michael. Jean-François, if I'm not mistaken, a substantial portion of Polestar's debt portfolio was renewed in the period, and also slightly broadened by, call it $300 million. I wondered, what is the new go-forward effective rate of interest on Polestar's debt portfolio, and is it floating mostly?

Francois.

I'm not mistaken a substantial portion of Pollstar stats portfolio was renewed in the period.

And also slightly broadened by call it $300 million.

I wondered what is the new go forward effective rate of interest on Pollstar depth portfolio and is it floating mostly.

I would say that most of our interest rate is based on the on the references. So it is a it is a it is floating yes.

Jean-François Mady: I would say that most of our interest rate is based on references. It is floating, yes.

Okay.

Did you have a number that you could share for the the new effective debt rate on the renewed portfolio.

Tobias Beith: Okay. Did you have a number that you could share for the new effective debt rate on the renewed portfolio?

I mean, there is no significant change to.

Jean-François Mady: I mean, there is no significant change, to call out.

To call out the previous one.

Okay understood. Thanks for your time.

Tobias Beith: Okay

Jean-François Mady: the previous one.

Tobias Beith: Okay. Fine. Understood. Thanks for your time, both of you.

Thanks.

We'll now move on to our next question.

Operator: Thank you. We'll now move on to our next question. Our next question comes from the line of Andres Sheppard from Cantor. Please go ahead. Your line is open.

Our next question comes from the line of Andreas <unk> from Cantor. Please go ahead. Your line is open.

Hi, good afternoon, everyone. Thank you for taking our questions.

Andres Sheppard: Hi. Good afternoon, everyone. Thank you for taking our questions. Was wondering if we could get an update on capital needs and liquidity. If you could maybe give a sense of, you know, cash burn, maybe what it was, what you expect for it going forward, and what is the timing for those additional capital requirements. Thank you.

I was wondering if maybe we can get an update on our capital needs and liquidity. If you could maybe give us a sense of cash.

Cash burn maybe what it was what what do you expect for it going forward and.

And what is the timing for those are additional.

Capital requirements. Thank you.

Okay. Thanks for the question. So in terms of in terms of cash burn and as I commented at the NIH. One so for the first semester, we have a monthly cash burn of around one 6 million U S. Dollar per months I mentioned at the time that the level of cash burn will increase I mean.

Jean-François Mady: Okay. Thanks, Andres, for the question. In term of cash burn, as I commented it in H1. For H1, we have a monthly cash burn of around $136 million per month. I mentioned at that time that the level of cash burn will increase during H2 due to, I will say, the spending or cash out related to legacy CapEx. Clearly, compared to last year, if I'm looking at the normalized cash burn, we are improving month after month. This is due to, I will say, the fact that we are cutting losses looking at our adjusted EBITDA, but also making strong action in order to improve our working capital.

The second semester due to I will say the spending of cash outs related to legacy Capex.

But clearly compared to last year, if I'm looking at the normalized cash burn. So we are improving month after month and this is due to I will say the fact that we aren't cutting low six looking at our adjusted EBITDA, but also making strong action in order to improve our working capital.

So we demonstrated at the end of each one that we have collapsed the level of inventory at 40000 units for more than 22 23000 units at the end of December.

Jean-François Mady: we demonstrated at the end of H1 that we have collect the level of inventory at 40,000 units for more than 22,000, 23,000 unit at the end of December. of course, we are quite vigilant in term of the level of receivable and working as well, leveraging our payable and the payable from our related parties. I think that we are in a good track to improve the level of cash burn, but still, unfortunately, we are burning more cash as planned because we have faced so the increase of tariffs, more challenging market context, which has deteriorated our profitability.

And of course, we own quite vigilant in terms of the level of receivables and working as well.

Leveraging our payable and the payroll from a related related parties. So I think that we are in a in a good track to improve the level of cash burn, but still uncertainty we are learning more cash as plan because we are safe. So the increase of salaries more challenging market context, which has deteriorated.

Our profitability.

Now when it comes to I would say our funding needs. So as you're aware. So we have raised 300 million years surround new equity coming from the investment company with one by Mr issue, who is the founder and chairman of Citigroup.

Jean-François Mady: When it come to, I would say, our funding needs. As you're aware, we have raised $200 million new equity coming from PSD Investment Limited, which owned by Mr. Li Shufu, who is the Founder and Chairman of Geely Group. Based and following to this new equity, we are working actively and always with a positive mindset with Geely Group in order to further increase, I would say, our funding. As we all know that we cannot only rely on the debt from the bank. We have to fund some new equity. This new equity in June was clearly a positive sign from Geely Group about supporting Polestar, but also the willingness that further will come.

And the base and following to this new equity we are working actively on the always with a positive mindset with citigroup in order to further increase.

I would say our funding as we all know that we cannot only.

We rely on the debt from the bank, we have two funds for new equity on this new equity in June was.

Eddie.

The positive sign from Citigroup about supporting per style, but also the willingness that the silver with a will come so we aren't competitive align with our with Gd groups in terms of liquidity and funding plan that we are executing and were not is it take to come back to you and to the investment community.

Jean-François Mady: We are completely aligned with Geely Group in term of liquidity and funding plan that we are executing. We will not hesitate to come back to you and to the investment community if there is more to comment as and when required.

If there is a.

More to comment as and when required.

Wonderful that's very helpful. I appreciate all that color and maybe one for for Michael I'm wondering if you're gonna be talk a little bit about our autonomy, we're certainly seeing a bit of a trend in the automotive business with different autonomous partnerships curious if you could maybe.

Andres Sheppard: Wonderful. That's very helpful. Appreciate all that color. Maybe one for Michael. I'm wondering if you can maybe talk a little bit about autonomy. You know, we're certainly seeing a bit of a trend in the automotive business with different autonomous partnerships. Curious if you can maybe talk about opportunities that Polestar might be pursuing here. Is this an area of focus? Anything you can say there. Thank you.

Talk about opportunities that pulsar money pursuing here is this scenario of focus anything you can say there. Thank you.

Yeah sure. Thanks, Andre So happy to do that of course, I mean, it's an important area because it's the future right. It will increase and we are have obviously various partners already with mobile lie on the post a four we look at other alternatives in the various regions at the same time, we want to have the good balanced because our brand really stands for performance. So I mean.

Michael Lohscheller: Yeah, sure. Thanks, Andres. Happy to do that. Of course. I mean, it's an important area because it's the future, right? It will increase. We have obviously various partners already with Mobileye on the Polestar 4. We look at other alternatives in the various regions. At the same time, we want to have the good balance because our brand really stands for performance. I mean, our customers are really performance drivers in general. Of course, we can combine these two things, right, and have higher level of autonomy when you don't want to drive, right, and use it. At the same time, make sure that everybody understands, look, Polestar stands for design, performance, and sustainability. Yes, various, partnerships like the one with Mobileye highlighted by me, and it's a key focus area for us.

Our customers are really performance drivers in general but of course, we can combine these two things right and have higher level of autonomy. When you don't want to drive Fry it and use it at the same time make sure that everybody understands low pollstar stands for design performance and sustainability. So yes, various partnerships like the one with.

Mobile I highlighted by me and it's a key focus area for US and obviously also look very carefully into the overall group possibilities and will absolutely stay a topic for the future so more to come on that thanks for the question.

Michael Lohscheller: Obviously, also look very carefully into the overall group possibilities and will absolutely stay a topic for the future. More to come on that. Thanks for the question.

Wonderful very helpful. Thank you so much I'll pass it on.

Andres Sheppard: Wonderful. Very helpful. Thank you so much. I'll pass it on.

Thank you.

There are no further questions at this time, so I'll hand, the call back to Michael for closing remarks.

Operator: Thank you. There are no further questions at this time. I'll hand the call back to Michael for closing remarks.

Thank you everybody. So this concludes our earnings call. So thank you for joining wish you a wonderful day and keep in touch and thank you everybody.

Michael Lohscheller: Yeah. Thank you, everybody. This concludes our earnings call. Thank you for joining. Wish you a wonderful day and keep in touch. Thank you, everybody.