Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 144

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 5
Chunk 144
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 is uncertain whether these inflationary pressures will persist in the future.

Tariffs and other regulation

A significant portion of Polestar's vehicles sold in the year ended December 31, 2024 were manufactured in China. Both the United States and the European Union imposed tariffs against electric vehicles ("EVs") imported from China. These tariffs have increased the total cost of the vehicles that Polestar manufactures in China and imports into the European Union and the United States. Polestar is mitigating the financial risk posed by these tariffs by expanding production to manufacturing facilities outside of China. Production of PS3s in Charleston, South Carolina began in 2024, production of PS4s at Busan, South Korea is expected to begin in 2025 and the Polestar 7 is expected to be manufactured in Europe.

Subsequent to December 31, 2024, the US administration has announced a number of tariffs that impact imported vehicles and vehicle parts and components. Whilst the precise impact of these tariffs on the cost of Polestar's vehicles manufactured in the United States using imported components and those manufactured outside of the United States and imported for sale is not yet known, it is expected that costs will increase. If Polestar does not increase its prices to compensate for this increase in costs, its gross margin will be reduced. If Polestar does increase its prices, it may negatively impact market demand for Polestar's cars and therefore future sales volumes.

Additional key factors impacting performance

Polestar’s continued growth depends on numerous factors and trends, including continued sales of the PS2 and the PS4 at anticipated volumes while production and sales of the PS3 ramp-up and the full production and delivery of the PS5 begins. Ramp-up of the PS3 includes increasing sales in the US and European markets, which is, in part, dependent on the successful ramp-up of production at the facility in Charleston, South Carolina operated by Volvo Cars. Polestar’s regional mix of sales, including higher sales in the US market, and its overall product mix, is important to maintain its gross margins. Ramping-up Polestar’s production at other facilities is also an important factor in the success of Polestar’s future vehicle production and delivery. In addition to increasing vehicle volume, Polestar is focused on developing additional revenue streams, such as carbon credits sales, aftermarket revenue, component sales, and used car sales. Polestar’s gross margins are dependent on Polestar’s current pricing structure, which is subject to a variety of factors, including certain average selling price assumptions. If Pole