Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 37

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 3
Chunk 37
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 and cash flow forecasts, Polestar concluded during 2023 that the book value of certain assets related to Polestar 2 needed to be written down, and as a consequence Polestar recognized an impairment loss of $249.4 million for intangible assets, $90.2 million for property plant and equipment, right-of-use assets (included within property, plant and equipment on the Consolidated Statement of Financial Position), and vehicles under operating leases, and $146.6 million for inventory. For the year ended December 31, 2024, after a review of sale and cash flow forecasts Polestar concluded that the book value of certain assets related primarily to Polestar 3, Polestar 5 and Polestar 6 needed to be written down, resulting in an aggregate impairment loss of $622.1 million. In the event of below forecast sales, pricing, and cash flows in the future Polestar may again as part of its regular impairment assessments be requirement to write-down the value of certain assets, which could negatively affect its financial results.

Polestar relies on various distribution approaches some of which are unproven and different from those employed by other automakers.

Polestar’s primary distribution approach of selling vehicles directly through users (rather than through dealerships), or, in certain countries, through third parties via a franchising model, is not common in the automotive industry today. In North America, for example, all sales are conducted through dealerships. Polestar’s direct to consumer approach of vehicle distribution, which has recently been adapted for certain markets to follow a non-genuine agency model where more active selling and sales support takes place in the showrooms of Space partners, is relatively new and has a shorter track record to prove long-term effectiveness. It thus subjects Polestar to risks as this approach requires, in the aggregate, significant expenditures and the development of an in-house sales and marketing team and may provide for slower expansion of Polestar’s distribution and sales systems than the traditional dealership system. Polestar has only recently adopted, to a limited extent, the long established sales channels developed through a dealership system to increase its sales volume. Polestar also leverages the existing Volvo Cars network of dealers as a pipeline of potential operators of Polestar Spaces or distributors (depending on the distribution approach in each country). Moreover, Polestar competes with automakers with well-established distribution channels. If Polestar’s lack of an established traditional dealer distribution network results in lost opportunities to generate sales, it could limit Polestar’s ability to grow. Pole