Polestar becomes Public listed electric car maker., Electric Vehicle News Bitesize
Polestar becomes Public listed electric car maker., Electric Vehicle News Bitesize

Polestar becomes Public listed electric car maker. Subscribe to Electric Vehicle News Bitesize Podcast for FREE!

Polestar becomes Public as stock debuted on Friday under the ticker “PSNY,” becoming the latest electric vehicle maker to go Public through a merger with a special purpose acquisition company (SPAC).

Shares of Polestar began trading on the Nasdaq exchange the day after the merger with SPAC Gores Guggenheim was completed. Shares of the electric vehicle maker closed at $13.00, up 15.8% from the SPAC’s close on Thursday.

Polestar chief executive Thomas Ingenlath said the company will use the $890 million raised from the deal to fund its three-year plan to build new cars and eventually become profitable.

But Ingenlath said Polestar, founded in 2017 as a joint venture between Sweden’s Volvo Cars and Chinese auto giant Geely, has moved beyond start-up status.

“We go public as an operating and successful business — not to raise capital to build a business,” Ingenlath said in a recent interview. “It’s because the next three years will be super-fast growth, the company is geared up for that with the product portfolio.”

In recent years, SPAC transactions have become an increasingly popular way for companies to go public. The required disclosures are simpler than in a traditional IPO. Unlike a traditional IPO, companies participating in a SPAC merger can provide investors with forward-looking statements that may help justify the high valuation. But there is no guarantee that these predictions will come true.

So far, most SPAC mergers with Electric Vehicle companies have not worked out well for investors. Even relatively better performers Lucid Group, Fisker and Nikola are currently trading 67%, 69% and 92% below their combined highs, respectively. Electric Vehicle truck maker Rivian, which went public through a traditional IPO, is also struggling. Shares are down 84% from their post-IPO peak.

But Polestar becomes Public with several advantages over its competitors. Volvo Cars still owns 48 percent of the company, and Polestar already has more than 55,000 vehicles on the road in China, Europe and the United States. It has an operating plant in China and an assembly line expected to start later this year at a joint South Carolina plant with Volvo.

Over the next three years, the company plans to add three more models to its existing range, the China-made Polestar 2 compact crossover. The additions are a large SUV, the Polestar 3; a midsize crossover, the Polestar 4; and a large sedan, the Polestar 5, intended to be the brand’s flagship.

All will be fully electric, and all will be available in the US, Europe and China. Polestar plans to produce cars in all three regions. By the end of 2025, Ingenlath expects Polestar’s three-year roadmap to bring the company’s annual sales to about 290,000 units.

Ingenlath said Polestar may need to raise more capital to become profitable — a milestone it expects to hit by 2025. If that’s the case, the company may issue bonds rather than sell more stock.

So far, according to Ingenlath, the company’s plans are well underway. Since the beginning of the year, the company has received more than 32,000 Polestar 2 orders from 25 different countries. Polestar also secured an order from car rental giant Hertz for 65,000 vehicles over the next five years, a deal Ingenlath said was primarily aimed at giving consumers the opportunity to try out the company’s electric vehicles.

Polestar plans to have a sales and service network in 30 countries by the end of next year, but Ingenlath said the company could hit that milestone earlier.

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Polestar becomes Public listed electric car maker., Electric Vehicle News Bitesize
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