Polestar has got an upgrade from Deutsche Bank following the Munich Motor Show with the German bank saying the luxury EV maker has plans in place to boost margins.
Volvo (Geely)-owned Polestar acknowledged the 4% margin target for this year is too low, but it is seeking underlying profit (EBIT) breakeven through better cost utilisation.
Some 27 markets have been already established and with the upfront investment made management indicated that this cost base now has to be utilised.
Margins require a hockey stick trajectory for the rest of the year to hit the breakeven target, but Deutsche Bank said improvements are expected to come from three key buckets: Dissipating discounting on MY23 Polestar 2; the start of sales for MY24 Polestar 2 and improving raw material input costs.
Share price target is US$4 against US$2.70 currently with a ‘hold’ rating.