Polestar Automotive Holding UK Limited

Good day and thank you for standing by. Welcome to the Polestar Q2 2023 results conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Bojana Flint. Please go ahead.

Thank you, operator. Hello, everyone. My name is Bojana Flint from Polestar Investor Relations. Thank you for joining our Q2 2023 results call. Before handing over to Thomas Singen-Lars, our CEO, and Johan Malmqvist, our CFO, for their opening remarks, I will cover some housekeeping points. I would like to remind participants that many 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 pollsters' 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 outlook and guidance, macroeconomic and industry trends, company initiatives, and other future events. Forward-looking statements made today are effective only as of today, and POSTA 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 factor sections of our annual report on Form 20-F filed with the SEC. In addition, Management will make references to non-GAAP financial measures during the call. A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our non-GAAP financial measures with our most directly comparable GAAP measures is in the investor after the presentation issued earlier today. With that, I'd like to turn the call over to Thomas. Please go ahead.

Thank you, Bayana. Let me reflect on some of the key operational and business highlights and outlook for 2023. It was a record second quarter for us, with 36% growth in deliveries versus last year. Combined with the first quarter, we delivered around 28,000 vehicles in the first six months of this year, with particularly strong growth in many of our established markets and solid growth in some of our newest markets. We increased revenue by 18% to $1.2 billion for the first six months of 2023. And with continued strong momentum into the second half of the year, we expect to deliver between 60,000 and 70,000 vehicles and a gross margin of 4% for 2023. Coming to recent business developments, Last quarter, I talked about the first customer deliveries of our upgraded Polestar 2, and these have now started to ramp up, taking us past another milestone, having 150,000 cars manufactured in just over three years. The upgraded Polestar 2 is the best version to date. We improved software, longer range of up to 650 kilometers, and faster charging, with an effect of up to 205 kilowatt. All while reducing created gate carbon emissions by three tons per car and introducing the new smart zone face identity from poster three on the two. It is a fantastic car. JD Power's Tech Experience Index placed Polestar 3 in the top three, and there are a number of enthusiastic independent reviews across motoring magazines and on YouTube. Just a few weeks ago, we were at the Goodwood Festival of Speed in the UK, where Polestar 3 and Polestar 5 had their dynamic debuts, making the traditional hill climb in front of the crowds. Seeing these two cars and what they are capable of in terms of performance and driving experience is a testament to our outstanding engineering teams. I'm delighted that Posta 3 is now available for customers to experience in many of our retail spaces around the world. And Posta 5 shows what the next steps are for our brand, reflected in its design handling and top-level sport premium positioning. We have started formally taking orders for Polestar 4, our SUV coupé, less than a week ago at the Chengdu Auto Show. And now, three days in, reception and order take have been fantastic. As a reminder, our SUV coupé combines the great space with amazing dynamic driving attributes. It is positioned between Polestar 2 and the Polestar 3 in terms of size and price. POSA4 is on track to start production in November, with the first customer deliveries in China expected before year-end. Deliveries to the rest of the world are planned for early 2024. Now moving on to our joint venture in China, which is taking steps to strengthen the development of our brand there. I believe that this innovative partnership with Xingji Meizhu Group An acknowledged mobile device company with excellent software competence is the best way to succeed in this important and highly competitive EV market. Software and user experience will be the key to the success. The latest steps on the important technology journey is autonomous driving. Last week, we announced a collaboration with Mobileye for the adoption of their autonomous driving solutions. making Polestar 4 the first production car to feature mobile ICE Chauffeur technology. When launched, Chauffeur is expected to offer ICE off point-to-point autonomous driving on highways, as well as ICE on automated driving for other environments. As our lineup grows, we continue to develop our commercial footprint, shifting to permanent larger retail spaces to deliver a premium customer experience. We have recently opened spaces in Porto, Portugal, Chengdu, China, and Houston and Palm Beach in the United States. In the UK, we are opening new retail spaces in Glasgow and North London in the coming months. And in Canada, we are expanding with additional spaces in cities where we already have a presence like Vancouver, Toronto, and Montreal. Staying in North America, We have announced the adoption of Tesla's charging standard for all new Polestar sold in the US and Canada from 2025, making it even easier to own and charge your Polestar. Finally, before I hand over to Johann, I want to touch upon the outlook. Despite macroeconomic uncertainty, we continue to expect a stronger second half, supported by the easing of supply chain disruptions and reducing raw material costs. As mentioned, we expect to deliver a 4% gross margin for the year. But this level of profitability is not enough. We have already taken steps to manage costs and are taking an even harder look at ways that will improve our margins. We continue to work closely with our two very supportive main shareholders on funding options. We will provide more detail on all our efforts and concrete actions in conjunction with the third quarter results. Thank you for listening in, and I look forward to taking your questions after Johan's remarks. Thank you, Thomas.