Another electric vehicle maker just went public through a SPAC merger. Sweden-based Polestar (PSNY, $12.49) began trading on the Nasdaq last Friday under the ticker symbol PSNY after merging with the special purpose acquisition company Cores Guggenheim.
Polestar’s first day of trading was a great success. It ended the day at $13 even, up 15.8% the SPAC’s closing price the day before. However, the newly minted shares were down by almost 7% in after-hours trading. According to Polestar’s CEO Thomas Ingenlath, the $890m raised from the SPAC merger will go towards funding its three-year plan to build new electric vehicles and eventually become profitable.
The company plans to add three new electric vehicles to its current model line-up over the next three years: a large SUV, a midsize crossover and a large sedan to be rolled out in the US, Europe and China. By the end of 2025, Polestar expects to sell about 290,000 vehicles annually.
Why it matters
SPAC mergers have taken off in the last few years as a simpler alternative to the traditional IPO process. So far, most of the electric vehicle companies that were merged into SPACs have performed poorly, with the likes of Lucid (LCID, $19.21), Fisker (FSR, $9.18), Nikola (NKLA, $5.61) and Rivian (RIVN, $29.50) currently trading below their post-merger highs. But Polestar might have a few things going for it compared to its competition. For one thing, Volvo Cars own a 48% stake in the company, with more than 55,000 vehicles on the road across China, Europe and the U.S.
