Polestar narrows quarterly loss on cost-saving push, improved demand

May 12 (Reuters) - Swedish electric-vehicle maker Polestar PSNY.O reported a 31% reduction in its quarterly loss on Monday, in a sign that the company's efforts to cut costs across its business and push sales of its higher-priced models were bearing fruit.

Polestar had been grappling with ballooning losses over the past several quarters amid a broad slowdown in EV demand, prompting the company to launch a cost-cutting drive that included job cuts, lowering manufacturing costs and tightening marketing spend.

The company, backed by China's Geely Holding GEELY.UL, would also benefit from the U.S.-China deal on tariffs. The world's two biggest economies said on Monday they would temporarily slash reciprocal tariffs that had triggered a damaging trade war and ripped through financial markets.

Polestar last month paused its 2025 forecast bracing for a hit from the previously announced tariffs amid its efforts to shift manufacturing to the U.S. and Europe and reduce reliance on China.

Polestar said on Monday its net loss narrowed to $190 million in the first quarter ended March 31, from $276 million a year earlier.

Its gross margin also improved to 6.8% in the reported quarter from a negative margin of 7.7% last year, as demand for pricier models helped offset the impact from discounts and price reductions.

Polestar said it also ended its joint venture with Geely's Xingji Meizu in China following losses from the partnership. The companies joined forces in 2023 with goals to build an operating system for Polestar cars sold in China that would offer the latest smart technologies in the vehicles.

Revenue jumped 84% to $608 million in the January-to-March quarter, on the back of strong retail sales. Polestar sold around 12,304 vehicles in the quarter, compared with 6,975 vehicles a year ago.

The company filed its fourth-quarter financials on Friday after delaying it several times.