Polestar is the latest electric car manufacturer to go public following a merger with special purpose acquisition company (SPAC) Gores Guggenheim Inc, raising $890 million in the process.
The Swedish electric performance car brand began trading on the Nasdaq in New York on June 24 under the ticker PSNY. The US listing marks a significant milestone for the brand that launched in 2017 combining startup agility with access to established OEM manufacturing expertise and capacity from its main Volvo Cars and Geely.
"This is a hugely proud moment for the entire team at Polestar. We will now open a new chapter in our story that can be summarized in one word – growth. By 2025 we aim to be selling 290,000 cars per year, 10 times as many as we sold in 2021. We already have a real and successful business; this listing gives us the funds and platform to help deliver our ambitious future plans and drive industry-leading sustainability goals forward."
Thomas Ingenlath, CEO of Polestar
Polestar's shares ended their first day at $13,00, up 15.8% from the SPAC's final closing price on June 23. According to CEO Thomas Ingenlath cited by CNBC, Polestar will use the $890 million raised from the deal to fund its three-year plan to expand the product lineup and eventually become profitable.
The executive noted that Polestar, which began as a joint venture between Volvo Cars and Geely, has progressed beyond startup status.
Gallery: Polestar 5 Prototype at the 2022 Goodwood Festival of Speed
"We go public as an operating and successful business — not to raise capital to build a business. It's because the next three years will be super-fast growth, the company is geared up for that with the product portfolio."
SPAC deals have become a popular way for companies to go public in recent years as they require simpler disclosures than those in a traditional initial public offering (IPO). However, most SPAC mergers with electric vehicle companies haven't worked out well for investors. For example, Lucid Group, Fisker and Nikola are currently trading at 67%, 69% and 92% below their post-merger highs, respectively—and these are the most successful examples.
Polestar could have several advantages over these startups. Volvo Cars still owns 48% of the company and the EV maker has a factory up and running in China, with a US assembly line to become operational later this year in South Carolina to build the brand's first SUV, the Polestar 3. In addition, Polestar has more than 55,000 vehicles (mostly Polestar 2 electric sedans) on the road in 25 global markets including China, Europe and the United States.
The company plans to add three vehicles to its lineup over the next three years: the Polestar 3 midsize SUV this year, the Polestar 4 compact crossover in 2023, and the Polestar 5 flagship sedan in 2024.
Polestar will ring the opening bell at Nasdaq in New York City on June 28 to celebrate its debut as a publicly traded company.