PSNYW

• Polestar's brand focuses on design, performance, and sustainability. Products like Polestar 4 won awards, Polestar 3 set a Guinness World Record, and Polestar Charge offers access to over 1 million charge points in Europe. • Polestar 5 launch on September 8 at IAA in Munich, Polestar 7 to be manufactured in Kosice, Slovakia with Volvo Cars starting in 2028. • Commercial operations: grew number of sales points excluding China by 40% to 169, launched in France in June with all 3 models available. • Financial results: revenue up 56% to $1.4 billion, adjusted gross margin improved excluding impairment, adjusted EBITDA loss narrowed by 30%. • Operational improvements: optimized marketing spend, reduced administrative costs, continued product cost reduction.

Management will not be issuing financial guidance at this time but reiterates the target compound annual retail sales volume growth of 30% to 35% over 2025 and 2027.

Retail sales volume in the first half of 2025 grew by 51% to over 30,000 cars, ahead of the 30%-35% growth target for 2025-2027. Polestar 3 and Polestar 4 made up well over 50% of the volume. Revenue increased by 56% to $1.4 billion, driven by higher sales volume and a growing share of higher-priced Polestar 3 and Polestar 4 models. Europe is the main regional market, with strong performances in the U.K., Germany, Belgium, Nordic region, and APAC (South Korea). Carbon credit sales amounted to $90 million, with $72 million booked in revenue and $80 million in other operating income. The adjusted gross margin, excluding impairment expense, improved to a positive 1.4% in H1 2025 from a negative 2.6% a year ago.

• Geopolitical and market challenges impacting profitability. • Tariffs and mounting pricing pressure affecting Polestar 3's volume and profitability. • Uncertainty in the U.S. market due to tariffs and policy changes. • Impact of external factors on cash position and overall financial performance.

Q: Comment on demand environment quarter-to-date and bridge from Q1 to Q2 adjusted gross margin.

A: Michael notes BEV markets still growing in Europe but shifts in segments; Jean-Francois explains margin decline due to car line and channel mix, pricing pressure, tariffs, and inventory assessment.

Q: Quantify potential reimbursements to contract manufacturing partners.

A: Michael states they have long-term agreements with partners and work through changes but don't provide specific figures.

Q: How to establish brand independence from Geely and Volvo?

A: Michael says Polestar has separate showrooms, strong brand differentiation, and incremental business for dealers, with products like Polestar 5 as brand halo.

Q: Liquidity, cash burn, and impact of Polestar 5 on ASPs and margins.

A: Jean-Francois mentions cash at $719 million, working capital improvement but higher cash use in H2 for investing; Michael says Polestar 5 is a brand shaper, not volume model, with positive margins but limited volume impact.

Q: U.S. presence and path to EBITDA breakeven.

A: Michael notes 8% U.S. exposure, focus on Europe; Jean-Francois says working on new business plan and assessing external headwinds to determine path to EBITDA breakeven.