Polestar Automotive Holding UK PLC (NASDAQ:PSNY) Q3 2022 Earnings Conference Call November 11, 2022 8:00 AM ET
Company Participants
Bojana Flint – Head of IR
Thomas Ingenlath – CEO
Johan Malmqvist – CFO
Conference Call Participants
Winnie Dong – Deutsche Bank
Charles Coldicott – Redburn
Itay Michaeli – Citigroup
Alex Potter – Piper Sandler
Erik Golrang – SEB
Operator
Good day, and thank you for standing by. Welcome to the Polestar Third Quarter 2022 Results Conference Call. At this time, our participants are in listen-only the mode. After the speakers’ presentation, there will be the question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.
I would now like to hand the conference over to your first speaker today, Bojana Flint.
Bojana Flint
Thank you, operator. Hello, everyone. My name is Bojana Flint, I’m Head of Polestar Investor Relations. Let me cover a few housekeeping points before handing over to Thomas Ingenlath, our CEO, for his opening remarks; followed by Johan Malmqvist, our CFO, who will comment on our quarterly financial results in more detail. This will take about 15 minutes and we will then open the line for analyst questions. If we have some time left, we’ll take questions from the web, which I will read out.
Before handing over call to Thomas, I would like to remind participants that many of our comments today will be considered forward-looking statements under the U.S. Federal security laws and are subject to numerous risks and uncertainties that may cause Polestar’s actual results to differ materially from what has been communicated. 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 section of our annual report on Form 20-F or our other recent filings with the SEC. You may also find more information on forward-looking statements in our filing with the SEC or on our investor presentation and recent press releases which are posted on our Investor Relation website.
With that, I would like to turn the call over to Thomas. Please go ahead.
Thomas Ingenlath
Yes. Thank you, Bojana. Hello, everyone. Thank you for joining our first quarterly results call. I will start with some opening remarks and then pass on to Johan to comment on our financial results and the 2022 outlook. Now, this is an amazing year for Polestar, full of major milestones. I’m particularly proud of the phenomenal global premier of the Polestar 3 that we delivered in Copenhagen a few weeks ago in front of hundreds of media, shareholders and customers. Polestar 3 is our first SUV, built for the electric age. It is full of fantastic features, centralized computing with NVIDIA DRIVE core computing, for example, running on software from Volvo Cars, making it one of the safest cars and prepared for the future of highway piloting. Polestar 3 is a car that has been designed as a Polestar from start to finish. It defines the essence of our brand in terms of design, luxury and ambition.
Other milestones were, of course, our successful listing on New York’s NASDAQ in June; a new global partnership with Hertz totaling 65,000 cars over the five years. We move fast here. Already today, you will find in seven countries in Europe and in the U.S. and Canada, a Polestar fleet with Hertz, and we are continuing month-after-month to expand this offer of electric Polestars into the mobility-on-demand arena.
Last week, we have announced a $1.6 billion financing package from our major shareholders. We welcome their strong and continued support, especially when capital markets are volatile and unpredictable. In the first nine months of 2022, we delivered approximately 30,400 vehicles globally, up around 100% year-on-year. Our fourth quarter is expected to be our strongest on record yet, and we are delivering against our 50,000 cars target. This is us meeting our annual targets for two years in a row, having also achieved our 2021 delivery target. We will celebrate next week a major production milestone, 100,000 Polestar 2 vehicles out of the factory gate. This solidifies our position as one of two global pure EV players already in mass production. Our cars have been recognized with multiple awards, and I’m particularly proud that the car design awards recognized Polestar with the prestigious best brand design language for 2022.
I would like to conclude with investment highlights that differentiate Polestar from others and will enable us to deliver on our strong strategy. One, our well-defined growth strategy, which are capturing by operating in fast-growing car segments, having a rapidly expanding premium product portfolio that includes 5 pure EVs vehicles by ’26, and with global footprint of 27 active markets today. Unlike most of our peers, our global ambitions, they are reality, not an aspiration. Two, the asset-light model. It combines the best of both worlds. Agility of a startup with a stability in manufacturing knowhow from Volvo Cars and Geely. Importantly, this gives us access to production capacities across Asia, Europe and U.S. without having to build our own factories or find manufacturing partners. Three, we have a digital first direct-to-consumer approach that is complemented by an extensive network of retest sales and service points. Four, our core pillars of design, innovation and sustainability, coupled with relentless focus and attention to detail. This includes avant-garde, pure Scandinavian design, performance-oriented hardware technology, innovative software solutions and smart partnerships, and the leading ambition to create a truly carbon-neutral car by 2030.
Now lastly, demand for Polestar 2 remains very strong. We would have easily exceeded our vehicle sales target were if not for Shanghai lockdown earlier this year. Initial reception and demand for Polestar 3 is also incredible. Over 800,000 of YouTube views watched the world premier of Polestar 3 online. It has created website traffic for Polestar, similar high to the bus that our extremely successful Super Bowl campaign produced earlier this year.
I would like to reiterate, Polestar is the real car company. We are in production. We are putting cars on the road today, and we are delivering on our ambitious growth plan.
Now, Johan, I would like to ask you to comment on our financial results.
Johan Malmqvist
Thank you, Thomas. And hello, everyone. And as Thomas said, thank you very much for joining our first quarterly earnings call. I look forward to interacting with many of you in the future, and please continue to engage with Bojana and the IR team who are always here to support. We’re glad that you are joining us on our exciting journey as a listed company now and into the future.
And moving on to the main part of my section, first, some operational highlights. We have delivered 30,424 cars globally in the first nine months of this year, of which 9,239 in the third quarter, alongside continued expansion in existing and new markets. As of today, we are active in 27 markets on four continents, and have 128 locations and over a 1,000 service points. We reaffirmed early this year as well as today that we are on track to deliver 50,000 vehicles by the end of 2022. We said we would catch up on production and we did. Our strong partnership with Volvo Cars and Geely has allowed us to navigate through the supply chain constraints. The remaining 20,000 cars for 2022 have all been produced and are making their way or being delivered to customers across the globe. Q4 2022 is expected to be our strongest quarter on record yet.
Now moving on to financial highlights for the nine months ended September 30, 2022. As this is our first earnings call as a listed company, I will focus on nine months, year to-date commentary versus the same period last year, and provide additional color for notable exceptions for the third quarter. Revenue increased 98% from $748 million in 2021 to $1.48 billion in 2022, mainly driven by an increase Polestar 2 vehicle sales across existing and new markets. This growth was partially offset by slightly lower revenue per vehicle due to product and market mix. And to put this into context, during the first nine months of 2021, we mainly sold long-range dual motor variants of the Polestar 2. While throughout this year, we are also selling lower price variants, which have an impact on revenue per vehicle.
Gross profit increased from $1 million in 2021 to $57 million in 2022, leading to a gross margin increase from 0.1% to 3.9%. This was driven by higher Polestar 2 sales and lower fixed manufacturing costs. When we look at Q3 2022, gross margin was 0.9%. This is the reflection of two factors. Firstly, a negative market mix from proportionately higher sales outside of Europe where revenue per car is typically lower; and secondly, from FX headwinds. As our cars are produced in China, the majority of our costs are in renminbi, which are strengthened against European currencies, leading to a higher cost of sales.
Selling, general and administrative expenses was only 31% higher at $625 million compared to the 98% growth in revenues as we start to accrue benefits of scale. For the third quarter this year, SG&A expense was $20 million lower compared to the same period last year. This reduction was driven by management actions in curtailing, advertising, marketing, and promotional activities in anticipation of the expected lower volumes in Q3.
Research and development expenses were down 22% to $123 million, due to lower amortization of intangible assets, partially offset by higher spend on future vehicles and battery electric technologies. Operating loss was 64% higher at $1.08 billion, impacted by a $372 million non-recurring non-cash share-based listing charge in connection with the business combination that we reported in Q2 2022. Excluding this listing charge, operating loss increased 8% from $658 million in 2021 to $709 million in 2022. For the third quarter of this year, operating loss decreased 33% to $196 million, benefiting from higher revenues and active cost management action. And lastly, net income for the third quarter was a positive $299 million due to the gain on the change of the fair value of the earn-out liability and warrants of $561 million, which is primarily attributable to the change in the share price.
Moving on to the balance sheet. At the end of September 2022, cash and cash equivalents stood at $988 million. Now in regards to cash flow, cash used for operating activities year-to-date was $1.02 billion, driven by an increase in working capital as well as higher operating losses and interest expenses. Cash used for investing activities was $653 million, mainly due to the cash settlements for the Polestar 2, 3, and 4 intellectual property investments. Cash provided by financing activities was $1.97 billion, driven by the net listing proceeds of $1.42 billion and short-term working capital facilities totaling $1.56 billion, partially offset by nearly $1 billion in principal repayments.
Now, as Thomas mentioned, we obtained a $1.6 billion shareholder financing and liquidity package from our two major shareholders, which demonstrates their commitment and confidence in our future. This financial and liquidity package comprises of an $800 million 18 month term loan from Volvo Cars, matched in terms of total amount by the direct and indirect financing and liquidity support from our other main shareholder PSD Investment. And you can find more detail on Slide 16 in our investor update presentation.
With the current macroeconomic and capital markets environment as a backdrop, the support from our major shareholders allows us to focus on ramping up the business to deliver the cars to our customers for Polestar 3 start of production and first customer deliveries. This funding transaction also allows us time to unlock a broader range of longer-term financing alternatives when conditions in the capital markets improve.
Before I hand over to the operator, let me wrap up with the outlook for the rest of this year. As I said before, despite continued supply chain constraints, we are on-track to deliver on our full year guidance of 50,000 cars. We expect to deliver approximately $2.4 billion in revenues, driven by strong Q4 2022 sales. We expect gross margins in the fourth quarter to be broadly in line with Q3 2022 with similar pressures from product and market mix alongside foreign exchange. We do expect a greater impact from higher raw material costs to flow through but to be partially mitigated by the vehicle price increases implemented earlier this year.
In terms of accessible liquidity, with $988 million cash balance at the end of September 2022, the $1.6 billion shareholder financing liquidity package, alongside other potential financing solutions, we anticipate adequate funding through 2023.
Thank you again for joining. And now over to the operator for the Q&A section.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions]. Now, we’re going to take our first question and it comes from the line of Winnie Dong from Deutsche Bank. Your line is open. Please ask your question.
Winnie Dong
Yes, I was wondering if you can quantify sort of how much mix and FX was impacting revenue and gross margin in the quarter. And then what are the puts and takes for the Q4 margin that’s right there?
Johan Malmqvist
In regards to FX, I think what I can say there is that, if we look at the FX exposure we have, it’s predominately related to the fact that we have manufacturing in China; and therefore, the exposure to the renminbi. Just to provide some guidance on sensitivity, I think, which is the best way to answer your question. If we look at a full year impact of a 10% change in the CNY versus SEK, that would equate to approximately $200 million on EBIT.
Winnie Dong
Okay, got it. And then sort of similar headwind and regional mix expected for Q4 impacting Q4 margin, thus putting it sort of in line with Q3. Is that the right way to think about it?
Johan Malmqvist
Yes, that’s correct. That’s our expectation that the Q4 margins would be broadly in line with Q3, similar pressures from the product and market mix alongside the foreign exchange.
Winnie Dong
Okay, got it. And then I was wondering if you can also then provide a bit more color on the $800 million in capital from PSD. How much of that is committed? And any specifics on like what form or shape the liquidity might come through at?
Johan Malmqvist
Sure. So just to provide some more color then on this $1.6 billion shareholder financing and liquidity package. On the one hand, there is the $800 million term loan from Volvo Cars with an optional equity conversion feature in connection with the future equity raise by Polestar. This is then matched in terms of total dollar amounts by PSD, who will support the combination of various financing arrangements, and that’s ranging them from certain — funding certain assets, and that may include purchasing non-core assets or entering into sale and leaseback arrangements. Also ensuring access to additional working capital facilities and that may include them providing collateral support either directly or indirectly. And all of this we expect to materialize during the course of next year.
Winnie Dong
And then how do we think about puts and takes for sort of 2023 in terms of demand? What are you seeing sort of in the U.S., Europe and China, how they’re affecting demand into 2023 deliveries? Do you anticipate additional sort of pricing actions?
Thomas Ingenlath
So we were not planning on providing any 2023 outlook today. This is something that we will come back to and provide some guidance on our next earnings call when we cover the Q4 and the full year.
Operator
And the next question comes from the line Charles Coldicott from Redburn.
Charles Coldicott
So my first one, on the comment about you having sufficient funds to last through 2023, I think the guidance that you gave during the leaseback process was that free cash flow would be close to neutral in 2024, but maybe that’s changed. Could you tell us how much funding beyond this $1.6 billion you need to eventually become self-funding and what year that will be?
Thomas Ingenlath
Hi, Charlie. So I think given all the current market uncertainty, we are not going to give guidance on a specific point in time. I think what we can say is that we do expect to breakeven within the context of us reaching our 290,000 volume plan.
Charles Coldicott
And then, just going back to the gross margin in Q4 and maybe into next year, in the text of your document, you mentioned that price increases for batteries and other components that have already taken place in the market have not actually been experienced by you yet because of the contract terms you have with Volvo. So could you talk about when you expect the impact of higher battery costs and what will be the magnitude of that impact on the gross margin?
Thomas Ingenlath
Sure. So when we look at raw material, for example, we see that there was only a limited impact in Q3 from the increases of raw material costs. And then this is due to the time lag between when it’s reflected in our bill of materials to when it flows through our P&L.
With that being said, we also will experience the limited impact from the previously implemented price increases this summer due to the price protection of the order book at the time. So we expect both of these to have a larger impact in Q4.
Charles Coldicott
Okay, thank you. And then Volvo launched the EX90 yesterday. Now on a like-for-like basis, I think if I spec the cars with the same content, the launch version of the Polestar 3 long-range dual motor is about EUR 22,000 cheaper, which is about 20% cheaper than the [EX90]. Obviously, partly that’s it’s a 5 seater versus a 7 seater, to put a lot of the hardware and the battery pack capacity are identical. So how confident are you that the unit economics of the Polestar 3 are going to work on a much lower price point than the EX90?
Thomas Ingenlath
Well, I cannot confirm the 20,000 that you refer here. I think that I cannot confirm. And the picture is of course broader than that. You have to look into U.S., China and Europe pricing. And then our pricing of course is compared here with the global pricing that includes the Lidar, while we have — the pricing that you refer to with the pilot pack without the Lidar. So that will be of course an additional price on what you compare now. So all in all, we see that the positioning of the Polestar 3 pricewise is not at all — if you spec it rightfully at the same level is not at all below the EX90 pricing. So that I cannot confirm. We are definitely going here for premium pricing with the Polestar 3.
Charles Coldicott
Okay, understood. If I can speak one last one then, the U.S. market, can you talk about the impact of the Inflation Reduction Act, which obviously means that you don’t get the incentive on the Polestar 2 anymore, whether or not you can rectify that? I don’t whether you can shift it to Charleston, and how we think about as well as the Polestar 3?
Thomas Ingenlath
Yes. It’s a bit difficult to comment on that because there are still too many uncertainties. And we have to see really the full picture in the next year. Our customers are already at the moment excluded from that because of combined household income. That takes them obviously above that threshold. So for that reason, this is just for now not a major event for us. But again, it’s a little bit too early to really comment on that. That we have to see how it develops in the new year.
Operator
Thank you. Now we’re going to take our next question. Please stand by, and the next question comes to line of Itay Michaeli from Citi.
Itay Michaeli
Just a couple of follow ups. First, maybe going back to the Polestar 3, Thomas, hoping you can maybe share a little bit around what you might be seeing on reservations, your broader demand as well as maybe what you are seeing by region and — as well as a configurator, what portion of consumers might be choosing the performance pack for the Polestar 3?
Thomas Ingenlath
Yes. Reception for Polestar 3 has been fantastic. I mean, the launch was — we are satisfied and happy with the reception of it. You have to excuse me being here a bit turning this around. We have much more focus now for us to really concentrate now on start of production of this car, first customer deliveries, that is what we are concentrating on our focus, because we actually don’t worry or don’t — I’m not in doubt about the customer demand here. We really want to make sure now that customers don’t have to wait too long for the car and that we are actually able to deliver on that demand. And for that reason, that’s our strong focus.
Itay Michaeli
Great. Thank you. And Thomas, hopping on the Polestar 4, could you provide an update there on — it looks like from the slide, it still looks slated to launch next year. Just curious when you think production may start or if you can give us a little bit more color on when you may reveal that vehicle?
Thomas Ingenlath
Yes, that will be indeed part of our 2023 program to launch the car, at least, and where it will go into market first. We have situation that, of course, the development of Polestar 4 is on-track, very well advanced. A little bit of explanation here, obviously being spread out with the R&D for us this year, having the Polestar 4 complete. Different team working on it, secures that. There is a very strong focus from that side on this development. And it is therefore nicely on-track and we indeed will be preparing to bring this car to market within 2023.
Itay Michaeli
Perfect. And then maybe just a last question, maybe for Johan. As we think about cash flow in the fourth quarter, any color you could provide on how you think about working capital and maybe CapEx as well?
Johan Malmqvist
Yes, sure. Working capital in the fourth quarter, I would expect an increase in working capital in the fourth quarter, but not to the same extent that we have seen year-to-date. And the fourth quarter working capital increase would then be driven primarily by an increase in accounts receivable, following the higher sales in Q4, whereas I would expect inventory and accounts payable balances to be — remain very similar to what they were in Q3.
In regards to CapEx, there I would expect CapEx to be proportionately higher in Q4. But I would not expect it to exceed $1 million in total for the full year. I think any delta to prior CapEx guidance is related to timing rather than a change in the investment spend. So that would rather spill over into the next year then.
Operator
Now we’re going to take our next question. Please stand by. And the next question comes from the line of Alex Potter from Piper Sandler.
Alex Potter
So my first question is regarding, I guess, supply chain health, generally speaking, and then specifically also regarding outbound vehicle shipments from China. I know that generalized ocean shipping rates, they seem to have been coming down by a lot recently. But specific to the auto industry, I’ve heard that there’s still a lack of ships. It can be difficult to find ships that are capable of exporting cars out of China. So, given how important China is to your manufacturing footprint, just interested in hearing anything that you’re willing to share on that topic of ocean shipping rates? And then also, like I mentioned, more generally on just the status of the supply chain overall?
Thomas Ingenlath
Yes. When it comes to the logistics, yes, they are of course challenging. That is something that everybody is experiencing. Having said that, we have very, very experienced partners supporting us in that. Us now having, for example, 20,000 cars that have been produced, that we still have to deliver to the 50,000 target, which we are confident in doing. Why are we confident? Because indeed the logistics could be arranged. And yes, going out from China is one of the problems that you have to tackle in that. But there are alternatives around which we know how to deal with and work with and what we are using. So, generally the supply chain issues and COVID-19 stuff, there is a big experience by now over the two years that helps us to deal with that. Specifically logistics is something that in the broader Volvo, Geely frame, there’s something which is a very, very established and experienced organization that has been using these channels for decades, and indeed have ways and means of how to cope with this.
Alex Potter
And anything regarding semiconductors that you would want to call out?
Thomas Ingenlath
Well, what to say about this? Semiconductors, yes, that’s part of what I try to describe here, two years of what I call the new normal have made us, of course, deal with this on a weekly, on a monthly basis. And this is something that — will it change in 2023? No. All the experience that we have collected now to deal with that we will have to use again in 2023.
Having said that, this catch up that we have performed now here in August, September, October, of course we’re exactly under those conditions and we managed to — after the Shanghai lockdown to ramp up our production, have higher production than ever for Polestar 2 under exactly those circumstances. And that is exactly where we feel of course as well, that we go well prepared in 2023.
Alex Potter
Yes, I can appreciate it’s a challenging environment for you and for everyone else. So, I feel for you on that front. Maybe I’ll ask questions, just regarding sales and marketing. You mentioned that it ticked down here sequentially. Do you think that — I guess, I’m interested in learning maybe why that’s the case, are you just trying to preserve capital? Do you think this is a good sales and marketing run rate? Or do you think it’ll tick back up again now that you’re going to be pushing harder on Polestar 3? Just any commentary you could give on the outlook for sales and marketing spend would be helpful? Thanks.
Johan Malmqvist
Sure. Our action to curtail that here in Q3 was in part driven by just recognizing that we would have the expected lower volumes. Of course, as we enter into Q4 and next year, we will ramp that back up again in order to support those volumes. So I would view it more as something that impacted Q3.
With that being said, in light of the current market backdrop and of course the macro environment that we have and is likely to persist, we are very stringent in our spend, specifically as it relates to our operational costs, not only advertising and promotion. And there we are working across the company to identify and execute on cost efficient opportunities. And of course, that has to be balanced then with the growth phase we’re in. So we are very calculated in the areas we’re looking to hold back spend on.
Operator
[Operator Instructions] Now, we’re going to take our next question. And the next question comes to line of Erik Golrang from SEB.
Erik Golrang
I had four questions. Three of them have been asked. So I’ll take the last one, and it’s, sort of some help on your flexibility and maneuverability to the extent we get a clearly weaker sort of demand than economy next year. I mean, you say now you’re funded through ‘23 and I assume that’s based on your existing 4 costs, right? But let’s say things don’t — doesn’t turn out as well you expect, how much room is there for you to sort of cut down on CapEx, manage working capital a bit more efficiently on the OpEx side, marketing, et cetera? I mean, what — how much room for weaker demand is there, and while you still be able to keep a — to stay funded through next year? Any help there?
Johan Malmqvist
Yes. I think we recognize that the macro environment is challenging, and likely persists. So we’re not necessarily waiting for times to get worse. We’re already now taking actions to make sure that we’re very prudent in our spend. So managing our operational costs, it’s absolutely a key priority and that we are already taking actions towards. Like I said, identifying and executing on cost efficiency opportunities. And so that’s definitely one avenue.
Another avenue that we already today are working actively with is just around the whole revenue management, and of course in regards to optimizing mix levels of sales support, et cetera, et cetera. So I think if anything, all those work streams will just intensify. But again, we we’re not waiting for times to get worse. We’re already acting on those now.
Thomas Ingenlath
And I think what this $1.6 billion secure, of course, is well the investment into our product portfolio. So that is in that way secured and guaranteed that we will not have to compromise on that. Weaker demand whatever, of course, like we can work on marketing cost. Not having to produce these cars automatically will be, of course, a different business plan for us. So I think the main key is, with this funding support, we definitely can secure that we are on-track developing the company, our product portfolio, our business. So that the projections and ideas of where we want to be in 2025 are not influenced.
Johan Malmqvist
And I can just echo what Thomas said and the whole point of this is to safeguard the car programs. And so with the new — the three product launches we have over the next three years, we are really focused on delivering on those milestones for those products to then start generating the revenues and the margins.
Erik Golrang
Very good. Thank you. And then if I could just follow-up with a — to confirm what you said previously on the question of the Polestar 4. What — did you say that, we’ll see both the reveal and the production start next year? Or did you just confirm that it will be presented to us next year?
Thomas Ingenlath
Well, we will launch the car and that is not — I’m not talking here that we just go and present you the design of the car. That will be the start of the launch that includes, of course, as well industrial milestones that we will hit along the line in ’23.
Operator
Thank you. Now we’re going to take our next question. Please stand by. And the next question comes from the line of Charles Coldicott from Redburn. Your line is open. Please ask your question.
Charles Coldicott
Sorry, I thought I’d just jump back in if there was time. I wanted to ask on China as well. So I think if I’m correct, you only sold about 1,000 Polestar 2s in China this year. And I guess to an extent, you are prioritizing Europe because it sounds like it’s higher margin for you. But is it, demand in China is maybe a bit more muted than you would have liked? And if so, how do you solve that? Is it just that the domestic OEMs are very competitive when it comes to EVs in China?
Thomas Ingenlath
Well, obviously, the launch of the Polestar 3 — and I’d that definitely should underlying here, of course, the Polestar 4 will be very crucial products for us to get into a competitive and strong position here in China. And for that reason, definitely expect and work on a market in China, where with Polestar 3 and 4 we will accelerate and make that as well an important part of our business.
Charles Coldicott
Okay, understood. And then just another one on the fact that the latest funding round is from Volvo and Geely again. I wonder at what stage do you think that Volvo and Geely might be willing to perhaps relinquish some of their stake in order to increase the free float of Polestar?
Johan Malmqvist
Yes, Charlie, I mean that’s really a question for them rather than for us. The lockup from the SPAC transaction expires here in December. And of course that will relieve the shares not only from our two major shareholders, but from other — or from non-related parties as well, which then over time should help the free float. But in regards to your specific question for the share, I think that’s more of a question for our shareholders.
Operator
[Operator Instructions] There are no further questions at this time. I would now like to hand the conference over to our speaker Thomas Ingenlath for closing remarks.
Thomas Ingenlath
Okay then, thank you all for joining on our first quarterly results call. Let me then finish with three points just to summarize where we see the highlights of today, and that is definitely that despite the challenges that are affecting our whole industry, we are very delighted that we are on track to reach the target of 50,000 deliveries this year. Secondly, we have launched a Polestar 3, that’s a major real milestone for our company, taking us into that premium SUV sector. And last but not at least, the financing package secured from our shareholders allows Polestar to focus on delivering more cars to more customers. And as we talked about next year, you will not only see the first deliveries of the Polestar 3, but we will also launch the Polestar 4.
I look forward to telling you more when we speak next time, and hopefully see you as well, each other along this exciting journey of Polestar in 2023. Thank you so much.
Johan Malmqvist
Thank you very much.
Bojana Flint
Thank you.
Operator
That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.
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