Polestar is a joint venture between Volvo and Geely, Volvo’s Chinese parent company. With a headquarters in Gothenburg and a production plant in Chengdu, it is genuinely a dual-national automaker. The company currently offers Polestar 1 and Polestar 2, but they aim to add their first SUV, Polestar 3 in 2022.
On the 27th of September, Polestar announced it will go public using a special purpose acquisition company (SPAC) route. The company they decided to go with is Gores Guggenheim ($GGPI on NASDAQ), with an estimated valuation of $20 billion.
Polestar estimates that the implied enterprise value of about $20 billion is three times its projected sales in 2023 and 1.5 times its estimated revenue in 2024. Current Polestar equity holders will maintain about 94 percent ownership in the company. After the deal is finalized, the new name of the company shall be Polestar Automotive Holding UK Limited with the NASDAQ symbol “PSNY”.
Nio is at a valuation of almost $60 billion(with no cars sold in the US), and Xpeng is at $30 billion. Lucid went public earlier this year at a valuation of $24 billion. The difference between Lucid and Polestar is that Polestar already sold over 8000 vehicles in 2021, while Lucid is still in production.
There have been some disasters with electric companies that decided to go public via SPAC, such as Nikola, making investors more cautious with their future investments. This happened when the companies promised too much but delivered too little. Like we mentioned earlier, Polestar has already been selling cars for over a year. That puts it in a much better position than some of the others recently merged firms.
This is great news for Polestar, and we expect some big technology breakthroughs in the future!