Polestar Automotive Holding UK Limited

Good day and thank you for standing by. Welcome to the Pulsar Q1 2025 results conference call. 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 one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Polestar.

Thank you, operator. Hello, everyone. I'm Anna Gavrilova, Head of Investor Relations at Polestar. Thank you for joining this call covering the first quarter 2025 Select Financial Results for Polestar. I am joined by Michael Lochsheller, CEO, and Jean-Francois Maddy, CFO of who will give the operational and financial update, and then we will open the floor to analyst 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. 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 the reconciliation to the most directly comparable GAAP measure can be found in the appendix to the press release and in the form 6K published today. I will now hand over to Michael.

Thank you, Anna, and to everyone for joining us today. In January, we announced our plan for Polestar with ambitious growth targets and clear milestones. The first important milestone for us as a new leadership team is our Q1 volumes and financial results. And I'm pleased to say our Polestar plan is off to a strong start. We are delivering both from a commercial and financial point of view. After reporting 76% increases in retail sales for the first quarter compared to last year, we are also improving our financial performance. With revenue growth of 84% driven by sales of Polestar 3 and 4. Significant margin improvement with a 15% point swing to a positive gross margin of 7%. Significant fixed cost reductions. Net loss and adjusted EBITDA improvement. Polestar is in execution mode. We are making significant changes to our commercial operations, leveraging our growing model lineup and increasing efficiencies across all areas of the business. This is what we are doing and what we remain focused on. Consistency in our actions and conviction in our decision making over the last few months have created a strong momentum and we are making good progress. Firstly, let me talk about our commercial transformation. During the last few months, I have had the opportunity to meet with customers and retailers across all markets. What I've seen has really impressed me and reaffirmed the importance of our focus on commercial transformation, making it easier for more people to experience our cars. Because when they do, they get excited. That's why we are signing up new dealers across all markets. Our ambition is to grow our sales points by 75% until 2026. And in the first quarter of this year, compared to Q1 last year, we grew these by 33%, excluding China. The renaissance of the dealer is how I've referred to this over the last few months. And for me, this is the most important step on our journey. Some people prefer to buy online, configuring their cars on our website and going through the purchasing process from home. We will continue to serve these customers. But for a large part of the market, buying a car is different from any other purchase you make. Being able to visit a dealership, have technology and features explained, and financing solution described is more conducive to increasing sales. It also has the added benefit of enabling pre-owned sales. Along with our more active sales model and commercial agreements with dealers that allow them more freedom in how they sell Polestar, this is the foundation of our growth. Secondly, maximizing the value of our existing model lineup. We recently launched the updated model year 26 Polestar 2. The car that we have built our expansion on to date gets a number of new technologies and features, including a Qualcomm Snapdragon processor chip and the Bowers and Wilkert sound systems with 1,350 watts of power. Like all our cars, Polestar 2 continues to benefit from over the air updates, making this car even better over time. In support of our pre-owned business, we are now also providing battery state of health certificates, creating greater peace of mind for our customers. Polestar 3 continues to set new standards in the SUV segment, achieving a five-star Euro NCAP rating. It also achieved a score of 93% of child occupant protection, the highest score of any passenger car tested by Euro NCAP over the past nine years. Sales of Polestar 4 continue to increase across our major markets, and its popularity is reinforced by winning several awards, including Car of the Year in South Korea. Manufacturing of our SUV coupé in Busan, South Korea, is expected to start during the second half of the year, with preparations and prototype production going well. This is the latest step in developing our asset-light model, which already includes sites in China and the US, with plans for European production for Polestar 7 in the future. This flexibility and ability to manufacture cars as close to our customers as possible will become more and more important as geopolitical uncertainties increase. Polestar 5, our four-door Grand Tourer, developed by our own engineering teams and based on a bonded aluminum platform, is expected to start sales later this year. This car will set a new standard for its segment and reaffirming Polestar's position as a performance car company. Thirdly, we will continue to reduce our cost base and generate efficiencies, adapting our ways of working and structures as needed. This will make us more resilient as uncertainties around the world continue to increase. For example, as future Polestar cars will be based on group architectures, we are taking steps to realize efficiencies in our R&D organization. Adjusting our structures and reducing our cost base was very much part of our focus when we presented our updated business plan in January, and these steps are becoming even more important given the current uncertainty surrounding international tariffs and government regulations. As a result of this uncertainty, we announced that we are pausing our financial guidance for 2025. We reaffirm our growth target of 30% to 35% per annum between 2025 and 2027, a clear reflection of our ambitions and underlying continued growth in the EV sector. Polestar is the only global premium EV brand with a clear focus on design, sustainability, and performance. Our cars are winning more and more comparison tests against premium that we are here to compete with a growing network of experienced dealers. And of course, with really passionate and progressive colleagues throughout the world. I want to thank everybody for all their efforts. We are taking steps to give our strong brand and our incredible cars the spotlight and recognition they deserve. And we are just getting started. We want to grow more. We are doing the right things. With that, I'll end my opening remarks and hand over to Jean-Francois.