Like Lucid Group, Polestar has chosen to go public via a special purpose acquisition company (SPAC). Volvo’s electric performance car arm has announced plans to go public through a merger with blank-check firm Gores Guggenheim, with the newly formed entity to have a $20 billion valuation.
Once the deal is finalized, the new combined company will be held by a new public company named Polestar Automotive Holding UK Limited. The new entity is expected to be listed on Nasdaq under the ticker symbol PSNY.
According to Polestar, the implied enterprise value of approximately $20 billion represents approximately three times its estimated 2023 revenue and 1.5 times its 2024 estimated revenue. As part of the deal, current Polestar equity holders will retain approximately 94% ownership in Polestar and roll 100% of their equity interests into the pro forma company.
Gallery: Polestar 3
The $20 billion figure matches the reported valuation of Volvo, which plans to list on the Stockholm stock exchange this year; it is also double the value of Renault Group. Compared to other EV makers that went public in recent months, Polestar’s valuation is smaller, though. As of September 27, Lucid Group has a market capitalization of $41.16 billion, with Chinese companies like Nio ($57.97 billion), XPeng ($30.24 billion), and Li Auto ($27.28 billion) also having higher market caps than Polestar.
Founded in 2017 by Volvo Cars and Zhejiang Geely Holding, Polestar currently has two electric performance models on roads across Europe, North America and Asia: the Polestar 1 (technically a plug-in hybrid) and Polestar 2.
In addition, Polestar has plans to launch three new models by 2024. Last year, Polestar delivered approximately 10,000 vehicles, and by 2025 it expects to sell approximately 290,000 vehicles per year.
“The proposed business combination and listing position Polestar as a financially strong, future proof, global electric car company. It will enable us to accelerate our growth, strategy and most importantly, our mission towards sustainable mobility.”
Thomas Ingenlath, Chief Executive Officer of Polestar
Going public will help Polestar fund significant investment in new models and the expansion of operations and markets. The company aims to add three new EVs to its lineup by 2024, starting with its first SUV, the US-made Polestar 3 expected in 2022. Polestar also seeks to expand to 30 markets by 2023.