Polestar SPAC buzzed on Nasdaq after the electric carmaker went public following its merger with SPCAC. On June 24, it listed its stock on Nasdaq, trading under the tickr “PSNY” amidst growing uncertainty around EV stocks. The Swedish company is one of the many that went public after a special purpose acquisition company (SPAC)merger. Polestar Automotive Holding merged with blank-check company Gores Guggenheim Inc.
Polestar SPAC Merger
As Polestar goes public, CEO Thomas Ingenlath told CNBC that, “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.” He also shared that the nearly $890 million raised from the Polestar SPAC merger will be used to set the company’s three-year plan in motion. The EV maker wants to build a new fleet of vehicles and turn the company profitable.
The Polestar SPAC merger benefited the company as its stock began shares ended the day at $13.00, up by nearly 16% from the SPAC’s final closing price on Thursday. But the euphoria did not last for Polestar on Nasdaq. On Monday, Polestar SPAC shares dropped by almost 15%. By Monday evening, the company’s market valuation stood at $24 billion, making investors wonder whether the SPAC merger will benefit the EV maker in the long ride ahead.
Experts believe that although EV stocks initially benefited from the optimism prevalent in the market, supply chain issues and high prices have put a dampener on demand for electric vehicles. Investors are also wary of start-up stocks as fears of a recession loom large. Furthermore, components for EVs, especially batteries, have borne the brunt of high inflation, forcing manufacturers to hike the price of already expensive electric vehicles. It does not help that these companies do not have a loyal customer base, unlike traditional automakers who are now diversifying their fleet.
Rising oil prices and increasing demand for EVs do make evident that a revolution in the transport industry is unavoidable. But start-ups have had a bumpy ride in 2022, as economic instability and tighter budgets cast a dark shadow over the future.
Polestar Electric Vehicle
Although most companies that took the SPAC route have not been successful in driving up their fortunes, the Polestar electric vehicle has many things going for it. Volvo Cars still owns 48% of the company, and Polestar already has more than 55,000 vehicles on the road across 25 live markets in China, Europe, and the U.S.
In June, Polestar announced that it had begun delivering the new Polestar 2 electric cars to Hertz. The car rental company is set to deploy around 65,000 Polestar electric vehicles over a five-year period. Commenting on the partnership with Hertz, Ingenlath stated, “Our partnership with Hertz is an exciting milestone that provides the opportunity for a significant number of potential new customers to experience an EV for the first time, and it will be in a Polestar.”
Today, Polestar has been in operation for nearly two years and can produce around 300,000 EVs a year. It hopes to deliver around 50,000 units in 2022 and more than double it to 124,000 by 2023. By the end of 2025, the company wants to raise the bar to approximately 290,000 and expand its base in additional markets. Polestar SPAC has an operational factory in China and another assembly line is set to begin production in South Carolina, in a factory it shares with Volvo. Polestar electric vehicle, called Polestar 3, is the company’s SUV and will launch by the end of this year. Production for the electric SUV is expected to start in early 2023.
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