Electric car company Polestar goes public via SPAC

Polestar, the Swedish electric car company which is a joint venture between Volvo and Geely, goes public by merging with a Special Purpose Acquisition Company, or SPAC. Polestar is the latest electric vehicle company – and futuristic transport company – to go public through a reverse merger with a so-called “blank check” company.

By merging with a company backed by billionaire and “serial SPAC backer” Alec Gores and investment bank Guggenheim Partners, Polestar claims it will have an “enterprise value” of $ 20 billion. The deal will also earn Polestar a lot of money: $ 800 million from Gores Guggenheim’s trust account and $ 250 million from private equity finance (PIPE) investments “anchored by institutional investors from around the world. foreground, ”according to the company.

Those other investors include “Volvo Car Group and affiliates of Geely Chairman Eric Li,” and actor and activist Leonardo DiCaprio, among others, Polestar said. This is the biggest blank merger in the electric vehicle industry since Lucid Motors struck a $ 24 billion deal in February.

The company was formed out of Volvo in 2016 as a performance sub-brand, but has since recast as a brand for electric vehicles only. Polestar is jointly owned by Volvo and the automaker’s Chinese parent company, Geely. It is truly a dual nationality car maker, with a head office based in Gothenburg and an assembly line in Chengdu. Polestar has only released two vehicles so far: the $ 155,000 Polestar 1 hybrid coupe and the all-electric Polestar 2 fastback sedan. The Polestar 3, an electric crossover SUV, is expected to be unveiled in late 2021.

Photo by Andrew Hawkins / The Verge

Polestar is the latest electric vehicle company to go public by SPAC, joining others like Faraday Future, Lordstown Motors and Lucid Motors. Polestar differs from these companies, however, in that it actually sold its vehicles to customers. The company is the latest in a growing line of electric vehicle startups, autonomous vehicle companies and auto suppliers to go public by merging with “blank check” companies, which are listed investment vehicles. in stock exchange.

There were notable flops. Lordstown, Canoo and Nikola are among the electric vehicle companies that suffered downturns after their IPO. There is a feeling that in rushing to take advantage of the PSPC boom, these startups have been left behind to deal with the demands of being listed on a major exchange.

Polestar may have an easier time, however, thanks to its ties to major automakers like Volvo and Geely. The company says it delivered around 10,000 vehicles last year and plans to sell around 290,000 vehicles a year by 2025, with plans to launch three new models by 2024.

After the merger, the amalgamated company will be called Polestar Automotive Holding UK Ltd. and will be listed under the symbol “PSNY” on the Nasdaq Stock Exchange.