Polestar, a Swedish maker of performance-oriented electric vehicles backed by Volvo Cars and China’s Geely, plans to list shares on Nasdaq via a merger with blank check company Gores Guggenheim that will raise about $1 billion to expand its model line and production to go head to head with high-end Teslas.
The Gothenburg, Sweden-based company, which began as Volvo’s racing unit over two decades ago and was repositioned as a stand-alone EV company in 2017, sold about 10,000 units of its premium Polestar 1 and 2 cars last year and intends to add three new models and boost sales to 290,000 units worldwide by 2025. When complete the merger with Gores Guggenheim, a special purpose acquisition company, will give Polestar access to $800 million in cash and up to about $250 million from private investors. The deal values Polestar at about $20 billion, according to the partners.
“We are thrilled about the targeted addition of three new premium electric cars to our lineup by 2024, starting with our first SUV expected in 2022,” Polestar CEO Thomas Ingenlath said in an emailed statement. “The proposed business combination and listing positions Polestar as a financially strong, future-proof, global electric car company. It will enable us to accelerate our growth, strategy and most importantly, our mission towards sustainable mobility.”
Polestar, which also counts actor Leonardo DiCaprio as an investor, joins upstarts including Lucid, Rivan and Fisker Inc. as next-generation electric vehicle manufacturers going after a market that Elon Musk’s Tesla has dominated for the past decade. The Swedish company benefits from having more production experience than most of its new competitors—Rivian only began building vehicles this month, Lucid is about to start producing its Air sedan and Fisker launches next year—and alliances with Volvo Cars and automotive giant Geely that give it access to additional engineering resources and parts supply chains.
The proposed merger, which was approved unanimously by both companies’ boards, should close in the first half of 2022. The combined company will be called Polestar Automotive Holding UK Limited and trade under the ticker “PSNY.” The future models, the Polestar 3 SUV, 4 and 5, will be released in 2022, 2023 and 2024, respectively, and are to have range of about 360 miles (600 kilometers) per charge, the companies said.
The $155,000 Polestar 1 and $60,000 Polestar 2 are currently available in 14 global markets. With its new models and funds from the SPAC merger, the brand will be sold in 30 countries by 2023, Ingenlath said. In addition to being electric, the upcoming Polestar 3 and 4 models will feature “highway autonomy” driving capability, powered by Luminar laser lidar sensors, software from Zenseact and a computing system supplied by Nvidia, the companies said.
“Polestar is a stand-out company in the EV space—a design-led, sports-performance oriented electric OEM focused on industry-leading sustainability solutions,” said Alec Gores, Chairman and CEO of The Gores Group and Chairman of Gores Guggenheim.
The $20 billion valuation is based on multiples of Polestar’s estimated revenue in 2023 and 2024, the companies said. Current investors in Polestar will retain about 94% ownership in the company after the merger.