Cantor Fitzgerald Reiterates Underweight Rating on Polestar

Cantor Fitzgerald analyst Andres Sheppard reiterated on May 8, 2026, an ‘Underweight’ rating on Polestar.

Key Financial Highlights: PSNY reported 1Q26 revenue of ~$633M (up ~0.2% YoY), below our estimate of ~$749.3M (and vs. ~$632M in 1Q25), driven by deliveries of 13,126 vehicles, above our initial estimate of 12,677 vehicles (and above 12,263 deliveries in 1Q25).

Polestar also reported 1Q26 carbon credit sales of $21M. Gross Margin Beat: Polestar recorded a 1Q26 gross margin of ~(3.2%), above our estimate of ~(10.5%). Adj.

EBITDA. PSNY also reported a 1Q26 adj. EBITDA of ~($235M), vs. our estimate of ($288.1M), (and vs. ~($96M) in 1Q25, down ~145% YoY).

In 1Q26, PSNY reported an adjusted gross margin of ~(3.3%). Net Loss Beat. PSNY also reported a 1Q26 Net Loss of ~($383M), slightly above our estimate of ~($406.7M), (and vs. ~($166M) in 1Q25, down ~131% YoY).

Separately, management announced that as of 1Q26, Polestar’s global sales network includes ~28 markets, across 230 locations and 1,241 service points (vs. 1,243 previously).

Liquidity Update: PSNY reported cash on the balance sheet of ~$676M as of 1Q26 (vs. ~$1,159M in 4Q25). The sequential cash decline was primarily driven by adj.

EBITDA losses, negative working capital movement, and net repayment of financing facilities, partially offset by 1Q26 equity proceeds.

PSNY recently received $300M and $400M in equity financing in December and February, respectively, and Geely and Volvo previously agreed to convert ~$639M of outstanding loans to Polestar into equity ($274M converted by Volvo 3/31/26, with an additional $65M expected to be converted in 2Q26E).

Lastly, Volvo also extended the maturity of the remaining ~$726M to 4Q31.

For FY26, we are modeling a monthly cash burn of ~$120M, and in our estimates we model total additional capital raises of >$5B through 1H30E.

FY26 Guidance: “Low Double-Digit Rate.” In 1Q, PSNY reaffirmed its target of retail sales volumes “at a low double-digit rate,” and management expects the sales mix to include an increasing share of Polestar 4 coupe (the company’s best-selling model), followed by the introduction of a new Polestar 4 SUV variant later this year.

Targeting to Bring Four New Models to the Market. PSNY previously unveiled its newest vehicle, the Polestar 5, at the IAA Mobility Expo in Munich, Germany.

The Polestar 5 is a four-door electric grand tourer (GT), and while management has not yet disclosed the ASP of Polestar 5, we expect an initial price of ~$100,000, with deliveries to begin in summer 2026.

We also view this vehicle as a premium flagship model rather than a high-volume product. Polestar 4: Management previously disclosed that it began sales of Polestar 4 in North America, manufactured in Busan, South Korea, and has recently begun deliveries to Canada; management is targeting the start of deliveries of a new variant in 4Q26. Polestar 7: PSNY signed an MoU with Volvo Cars for the manufacture of Polestar 7 in Slovakia, with a planned launch of the premium compact SUV in 2028. Polestar 2: Management expects to launch a fully redesigned successor to the Polestar 2 in 1H27.

Separately, PSNY and Volvo disclosed plans to consolidate future manufacturing of Polestar 3 in Charleston, SC.

Our Thoughts: Despite retail sales growing ~7% YoY to record first-quarter volumes, revenue was essentially flat YoY, gross margin compressed to (3.2%) in 1Q26 (vs.

10.3% in 1Q25), and PSNY reported cash on the balance sheet of ~$676M as of 1Q26 (vs. ~$1,159M in 4Q25).

Recall that PSNY previously lowered its FY26 delivery target to “low double-digit volume growth” (from a prior target of 30-35% volume growth), as management continues to assess geopolitical uncertainty and tariffs’ impact.

Higher duties and tariffs, primarily on vehicles exported from China into the EU, remain a meaningful headwind in our view.

Separately, although the company has recently secured >$1B in financing, we still expect Polestar will have to raise additional capital over the next few years.

Overall, we remain Underweight-rated in the near term.

Valuation: We reiterate our Underweight rating on PSNY. In our model, we increase our FY26 opex to $990M (from a prior $900M). We value PSNY via a 10-year bottom-up DCF.

We assume an 11% WACC and a terminal value with a 2% long-term growth rate.

Key risks include: tariffs, slowdown in demand, continued supply chain disruptions, high cost of goods sold, a highly competitive market, the likely removal of the EV tax credit, and slower-than-expected customer adoption.

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