After closing its merger with the Gores Guggenheim SPAC, electric vehicle (EV) maker Polestar (PSNY) began trading on the Nasdaq today. Shares opened at $12.98 before sliding below $11 in midday trading.
Despite today's drop, it was a big day for the Swedish company, as it raised $890 million from the closing of the transaction, giving Polestar a valuation of over $20 billion.
“It’s a great, proud day for Polestar,” Polestar CEO Thomas Igenlath said in an interview with Yahoo Finance. “Obviously [the merger closing] was a very thorough process and not easy market conditions, but the business that we offer and being a company up and running… I think it supports our light-asset business model, actually proving it's working in very difficult market circumstances.”
Polestar, which is backed by Volvo (VOLCAR-B.ST) and China’s Geely (0175.HK), will use the proceeds from the completion of the merger to fund the company’s growth plan, which will see Polestar introduce three new cars in the next three years, and grow global sales from 29,000 last year to 290,000 by 2025.
In addition, Ingenlath reiterated the upcoming Polestar 3 electric SUV will be built at Volvo’s current plant in Charleston, South Carolina.
“The Polestar 3, which will premiere in October, will be the first Polestar that will be produced in the U.S., in an existing factory in Charleston,” Ingelath says. “This is indeed our idea, using existing manufacturing footprint - and this will start now in the U.S, we will as well go to Europe. So, indeed, our manufacturing footprint will be reflecting where our customer is.”
As Ingenlath notes, Polestar is fueling its growth mode with both new funding and leveraging pre-existing manufacturing facilities from partners like Volvo and Geely, to build and design new cars like the Polestar 3 and upcoming Polestar 5. The Polestar 1 and 2 are currently for sale, and the Polestar 4 SUV is slated for its debut in about a year.
But one area that has become a stumbling block for both established and upstart automakers like Polestar is the global supply chain crunch, which has limited quantities of items like semiconductor chips to lithium needed for EV batteries.
Ingenlath believes Polestar can limit the impact of these issues, and still deliver on its growth plan.
“Polestar's business is about leveraging the manufacturing footprint that is available in the [Volvo-Geely] group, it's about being part of the supply chain that the group has established,” Ingenlath says. “Ramping up production all the way to 290,000 - it's already in place, these are factories up and running, we have already the contracts and supplies for this - so we definitely think we are prepared to deliver on that.”