Polestar goes public after its announcement a few months ago. The merger with Gores Guggenheim Inc leads to Polestar successfully raising $890 million in funds. These funds will be used on its three-year plant to make new vehicles and become a profitable business.
Polestar was registered in NASDAQ under $PNSY on Friday. By the end of the day, the shares closed at $13.00. It is up to 15.8% from SPAC’s final closing price on Thursday. Polestar began as a joint venture. CEO Thomas Ingenlath said that Polestar began with the joint venture between Sweden’s Volo and China’s Geely. Now the company is going public, progressing beyond startup status with its success with the Polestar 1 and Polestar 2.
In early June, the company announced its plans to launch its first SUV. Polestar 3 will be an SUV, planned to be launched in October this year. Ingenlath said in an interview, “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.” It is known that startups going through SPAC deals to get publicly listed has become the norm. Polestar is seen to have progressed with its first two models.
SPAC deals have become a more popular way for companies to go public in recent years. The disclosures required are simpler than those in a traditional initial public offering. Unlike in a traditional IPO, companies participating in a SPAC merger are allowed to present forward-looking projections to investors, which can help justify a lofty valuation. But there’s no guarantee that those forecasts will come true.
So far, most SPAC mergers with electric vehicle companies haven’t worked out well for investors. Even the relatively more successful cases of Lucid Group, Fisker, and Nikola are currently trading at 67%, 69%, and 92% below their post-merger highs, respectively. EV truck maker Rivian, which went public via a traditional IPO, has also struggled. Its shares are down 84% from their post-IPO high.
But Polestar could have several advantages over competitors. Volvo Cars still owns 48% of the company, and Polestar already has more than 55,000 vehicles on the road in China, Europe, and the U.S. It has a factory up and running in China and an assembly line set to begin production later this year in a South Carolina factory shared with Volvo. Over the next three years, the company plans to add three vehicles to its current model, the compact Polestar 2 crossover built in China. The additions are a large SUV, the Polestar 3; a midsize crossover, the Polestar 4; and a large sedan, the Polestar 5, which is intended to serve as the brand’s flagship vehicle.