Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 143

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 5
Chunk 143
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 by GGI and deducted from the gross proceeds raised. The remaining $38.9 million were costs attributable to the Former Parent.

As part of the merger, Polestar exchanged rights and obligations to the public and private warrant instruments of GGI, resulting in the issuance of similar instruments in the form of Class C-1 Shares and Class C-2 Shares, respectively. Polestar also issued certain rights to earn out shares to existing owners. These instruments are accounted for as derivative liabilities under IAS 32, Financial Instruments: Presentation("IAS 32") and IFRS 9, Financial Instruments("IFRS 9"), which are measured at fair value with subsequent changes in fair value recognized in profit or loss.

As of December 31, 2024 and 2023, the Class C Shares were valued at $3.5 million and $6.0 million, respectively, resulting in an unrealized gain from the fair-value change of $2.5 million during the year ended December 31, 2024. As of December 31, 2024 and 2023, the earn-out rights were valued at $28.8 million and $155.4 million, respectively, resulting in an unrealized gain from the fair value change of $126.6 million during the year ended December 31, 2024. The fair values of these derivative financial instruments are volatile and influenced by changes in Polestar's share price, resulting in impacts to Polestar's net income or loss that are not directly related to ongoing operations. Nevertheless, these derivative financial instruments have a notable impact on our overall financial performance each period. Refer toNote 2 - Significant accounting policies and judgements included elsewhere in this report for more information.

Inflation

Global economic conditions have caused rising inflationary pressures on prices of components, materials, labor, and equipment used in the production of Polestar vehicles. Historically, increases in battery prices due to the increased prices of lithium, cobalt, and nickel contributed to increased cost of goods sold. More currently, Polestar has started experiencing a decrease in raw material costs related to batteries. Overall increases in the cost of components, materials, labor, and equipment are expected to lead to higher costs of goods sold in the future. Additionally, the natural time lag created by the production, shipping, and selling of vehicles results in a delay in

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price increases experienced by Polestar. In the past, increases in oil prices have also increased freight and distribution costs across all markets. It