Polaris shipping new electric ATV, announces quarterly profits up more than 60%

Polaris has started to ship the Ranger XP Kinetic, the company's new lithium ion-powered rechargeable side-by-side that is the first product from the 10-year partnership between Polaris and Zero Motorcycles.

The Ranger XP Kinetic sold out within two hours when the initial run was offered in December 2021. The vehicles, which are being assembled in Polaris' Huntsville, Ala., plant, start shipping to customers this week, and deliveries will run through early summer.

The Ranger XP Kinetic Premium and Ranger XP Kinetic Ultimate were priced at $25,000 to $30,000. The initial cost is high but the benefits of of the utility vehicle are expected to make up the difference.

"The Ranger XP Kinetic gives you the power to do more," said Josh Hermes, vice president in charge of off-road electric vehicles. "The electric powertrain really unlocks more capability, more durability, more performance for the utility customer to get more done at the end of the day."

Hermes said he knows the initial price tag is higher than other ATVs, but it will be offset by by the ease of ownership. There is no money output for oil and gas, and it requires less regular maintenance work.

The announcement of the electric vehicles shipping coincided with Polaris' first quarter results Tuesday. Mike Speetzen, chief executive of the Medina-based company, said that production of Ranger XP Kinetic was just one advancement among many that Polaris expects to announce this year.

"In January, we promised 2023 would bring industry-leading vehicle news, and with the recent launch of our fully redesigned RZR XP and production underway of our all-electric Ranger XP Kinetic, we are just getting started on that commitment and believe we will continue this momentum throughout the year," Speetzen said a news release.

The company is off to a fast start for this fiscal year. For the quarter ended March 31 the company earned $113.4 million or $1.95 a share, up 62% and 71% respectively from the first quarter of 2022.

Revenue increased 22% to $2.2 billion while gaining share in the off-road and on-road segments despite a mixed retail sales environment.

Revenue exceeded analyst expectations of $1.96 billion, and the company's adjusted earnings of $2.05 a share, which grew 55% from a year ago, were 19% higher than the $1.72 analysts were expecting.

The company continues to deal with supply chain issues, but Speetzen told analysts on the company's earnings call that the number of suppliers that are late is declining and the delays are smaller as well.

Despite the fast start to the year, the company did not increase its 2023 year-end guidance it set back in December. Extended winter weather helped snowmobiles sales and sales of the utility products have held up well. However, the recreational side has shown some weakness, and officials said they are reading conditions more cautiously given the uncertainty in the market regarding a potential recession.

"We want to make sure we give ourselves some room to manage through that and not get ourselves prematurely convinced that things are much better than they really are," Speetzen said.

The Ranger XP Kinetic is the first vehicle in the 10-year partnership agreement that Polaris signed with Zero Motorcycles in the fall of 2020 to develop electric options across its off-road and snowmobile portfolios. Zero Motorcycles based in Santa Cruz, Calif., is a leader in the development of high-performance electric engines.

There was a fair amount of work to adopt an engine designed for a motorcycle for use in a side-by-side vehicle, but with the Kinetic as a good template Polaris may start offering more lithium ion-powered options through its lineup.

In the near term, Speetzen said, that could mean more offerings in the Ranger lineup and some ATV options and select youth models.

"We are letting the consumer drive where we go," Speetzen said.

Shares of Polaris closed Tuesday at $106.98 a share, down 2.2%. During the past 52 weeks shares have ranged between $91.86 and $123.87.