Since its spin off from Volvo two years ago and listing on the US stock market, Polestar has lost nearly 95% of its value. This seven year old startup electric vehicle company is on the brink of delisting, and its financial performance is still deteriorating.
On June 28th, Polar Star Motors released its 2023 full year performance. This annual report was originally scheduled to be released a month ago. The reason given by Jixing Motors for the delay is that more time is needed to complete the correction reports for accounting errors in 2021 and 2022.
According to financial report data, sales of Polestar Motors increased by 6% to 54600 units in 2023, but revenue actually fell by $67.3 million. The announcement stated that the decline in performance was due to the increase in discounts and the decrease in carbon emission quota sales.
Due to the impairment of intangible assets, property, plant and equipment impairment, and inventory increase issues of Jixing 2, Jixing Automobile's gross profit decreased by $513 million last year, and its operating loss expanded to $1.459 billion.
In 2023, the sales gross profit margin of Jixing Automobile changed from positive to negative, dropping to -17.44%, and its net loss increased from 481 million yuan in 2022 to 1.173 billion yuan. Based on this calculation, last year, Jixing Automobile suffered a loss of $21500 per car sold, equivalent to approximately RMB 150000.
This independently operated enterprise has not yet generated positive cash flow. As of December 31, 2023, the cash and cash equivalents of Polestar Motors decreased to $769 million. During this year, Jixing Automobile also received a total of 2.095 billion yuan in financing, including long-term related party loans from Geely and Volvo, working capital financing, and short-term green trade revolving credit financing.
Due to long-term losses and the need for electrification transformation, Volvo has decided to stop "blood transfusion" to Polestar. In February this year, Volvo announced that it would no longer provide further financial support to Polestar. Subsequently, Volvo transferred 62.7% of its approximately 48% stake in Polestar to Geely Sweden Holdings, which became the largest shareholder of Polestar.
Citibank has rated the stock of Polestar Motors as "neutral/high-risk", with a target price of only $1.7. At the beginning of the year, Swedish Nordic Bank (SEB) directly lowered the valuation of Polestar from 18 billion kroner to 0 kroner, becoming literally worthless.
This week, the closing price of Wujixing Motors was $0.7, with a cumulative decline of 65% so far this year. Since the closing price fell to $0.95 on May 21st, the stock price of Jixing Motors has been below $1 for 27 consecutive trading days.
According to NASDAQ market regulations, companies whose stocks fall below $1 for 30 consecutive trading days will receive a delisting warning. If no corresponding measures are taken to save oneself and increase the stock price within 90 days after the warning is issued, stock trading will be announced as suspended. If Jixing Automobile is unable to raise its stock price in the next three trading days, the possibility of delisting is one step closer.
At present, the main models sold by Polestar Motors worldwide are Polestar 2 and Polestar 4, and the delivery of Polestar 3 has recently been launched. This new car made its debut six months earlier than the Polestar 4, which had already been delivered. However, due to Volvo needing more time to improve the software for the new production platform, the production plan for the Polestar 3 on the same platform has been repeatedly postponed.
In its early years, Jixing Motors focused on overseas markets, attempting to leverage China's low-cost electric vehicle industry chain and international brand influence to sell electric vehicles in multiple countries. But after the EU and North America imposed tariffs on China's production of electric vehicles, Polestar could only shift its production base overseas, which to some extent increased its production and manufacturing costs.
Citibank analysts mentioned in a research report that the Polestar 3 will start production in South Carolina this summer, the Polestar 4 will be produced in South Korea, and Polestar is also considering increasing its production base in Europe in the future.
At a time of sluggish global pure electric vehicle consumption, Polestar Motors is turning its attention to China, the largest market in the world for new energy vehicles. In 2023, a joint venture company named Jixing Technology was established between Jixing Automobile and Geely Holding Company Xingji Meizu, taking over the development of Jixing Automobile's business in China.
Shen Ziyu, CEO of Jixing Technology, pointed out in an interview with Interface News and other media at the Beijing Auto Show that Jixing Motors needs to take additional courses on brand, sales, and intelligence. In the future, its sales in the Chinese market will account for more than 30% or even 40%.
Xingji Meizu has now applied the Flyme Auto intelligent cockpit operating system to the Polestar 4, but the stimulating effect on brand sales is not significant. According to third-party data, the sales of the Polar Star 4 in China in the first five months of this year were only 884 units.
A senior industry analyst told Interface News that the core R&D and product definition rights of Jixing Automobile are still in Northern Europe, and the main sales market is also overseas. It is difficult to make concessions for the Chinese market and change the model definition. Moreover, the coordination between the research, production, supply, and marketing stages of Jixing Automobile has not yet been fully established, and its final sales situation will depend on multiple factors such as the number of offline store layouts, the sales team's ability to convert leads, supply chain coordination, and factory production capacity.