Polestar CEO talks SPAC deal, electric vehicle production, and the luxury auto market

Polestar CEO Thomas Ingenlath joins Yahoo Finance Live to discuss the company’s SPAC deal, EV production, and the outlook for the luxury auto market.

Video transcript

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JULIE HYMAN: Polestar, the electric car-maker making its public debut today via SPAC or de-SPAC, depending on how you define it. The company getting SPAC funding from the Gores Group and Guggenheim Capital, all as it tries to woo buyers with an expanding range of new vehicles, including its Polestar 5.

Joining us with more is Thomas Ingenlath, Polestar CEO. And Pras Subramanian is here with us as well of Yahoo Finance. Thomas, it's good to see you. So obviously, big milestone and one that was perhaps a long time coming because this deal was announced quite a while ago. Talk us through the milestone of today and why it perhaps took a little while to close this deal and get it done.

THOMAS INGENLATH: Yeah. Hi, good morning. Well, obviously, great proud day for Polestar, the first day of trading. Yeah, well, it obviously was a very thorough process and not easy market conditions. But in a way, the business that we offer and being a company up and running, I think it was as well the more convincing us doing this very successful finish. And that I think it supports our life as a business model being actually proving it's working under very difficult market circumstances.

PRAS SUBRMANIAN: Hey, Thomas. Pras here. So you guys raised around $900 million from the closing of this deal. How does that money work into your product plan, your portfolio to offer about, I guess, five cars by 2024?

THOMAS INGENLATH: Yeah, obviously, this new stage, bringing three cars out in the next three years, the 80 and 90 million obviously bring us a big, big step further to the year 2025. It will be a time of incredible growth of the company. And having this now done, being listed will be a crucial enabler for us to go into this new phase of growth.

BRAD SMITH: This is a hyper-growth phase as well, right, or at least attempting to ramp into a hyper-production phase for many companies in the EV landscape. But it's really going to come on materials as well. Do you have the necessary materials, as we've heard across kind of auto manufacturers right now that that's going to be key to ensuring that they can produce the batteries at scale that they need for a lot of electric vehicles too?

THOMAS INGENLATH: Well, you see, Polestar's business is about leveraging the manufacturing footprint that there is available in the group. It's as well about being part of the purchasing power and the supply chain that the group has established. And ramping up production all the way to 290,000 is already in place. These factories are up and running. We have already the contracts with the suppliers for this. So we definitely think that we're prepared to deliver on that.

PRAS SUBRMANIAN: Hey, Thomas, you guys announced some specs on the Polestar 5. I believe that's going to be racing up the hill in Goodwood later today or tomorrow. Talk to us about that car. I mean, almost 900 horsepower. Are you guys sort of targeting Porsche? Is that kind of the market you guys want to kind of go after?

THOMAS INGENLATH: Well, indeed the Polestar 5 is running up the Goodwood Hill yesterday already. Exciting to see this. And it's about two things. Yes, on one hand, the premium, luxury, sporty brand Polestar indeed will be in competition with the brand Porsche. But as well, our business model and concept, having that mix of using group technology to base SUVs on it, build exciting cars on that, mixing with, really, aluminum-bonded architecture that enables our sports cars. I mean, that again is quite a parallel thing that we have in common with the brand Porsche.

JULIE HYMAN: And Thomas, obviously, if you're competing with Porsche, you're targeting a luxury car buyer, Polestar a luxury-level vehicle. You're not new to the car industry. You've been through various economic cycles before. How do luxury car buyers behave in an economic downturn? And how do you feel really ramping up into your growth phase at a time when the economy is not growing at the same pace, either in the US or globally?

THOMAS INGENLATH: Well, on the one hand, you have to imagine this incredible momentum within the move towards electrification. And indeed, in these days when fuel prices are really record high, it's rather supporting that kind of momentum. So that definitely helps our growth ambitions.

And at the same time, well, clearly, the product portfolio that we're rolling out, the exciting products that we have in our portfolio will definitely help our brand, even in difficult circumstances, to gain our market share.

PRAS SUBRMANIAN: Hey, Thomas, you, mentioned that asset-light business model where you have factories in China. But also you're going to open a factory in the USA. Tell us more about that, how that's going, and how fast it's ramping up at this point.

THOMAS INGENLATH: We will be producing, in the US, the Polestar 3 that we are showing, having world premiere in October, will be the first Polestar that is going to be produced in the US. And now I have to correct you in that way, an existing factory in Charleston. It's a facility that's already up and running within the Volvo environment. And this is indeed our idea, using existing manufacturing footprint.

And this will start now in the US. We will as well go to Europe. So indeed, our manufacturing footprint will be very much reflecting where our customers are staying, 40% Europe, 30% US, and 30% Asia-Pacific, China. That is indeed what, in '25, will be our footprint.

JULIE HYMAN: And Thomas, this strategy is a little bit of a change from the original strategy of production in China. Is there something-- was this always the roadmap? Or did this change over time as you found your customers or perhaps dealerships or what-have-you, whatever it was, wanted more local production?

THOMAS INGENLATH: It's a reflection on two things. On one hand, electrification is, indeed, very, very strong now as well in the US and Europe anyway. So indeed, our market person in the US is stronger than we might have anticipated in the very beginning. And on the other hand indeed, setting up a manufacturing footprint that is spread globally over the three major regions is, as well, a reflection on the situation that we are in in the political environment that we find today.

BRAD SMITH: Thomas Ingenlath, who is the Polestar CEO, and Yahoo Finance's own Pras Subramanian joining us here for the conversation. Thanks so much, gents, for taking the time here this morning. We appreciate it.