The manufacturer of the highest quality electric cars, Polestar, has announced an agreement to go public through a combination with Gores Guggenheim Inc. (GGPI, Financial). The Swedish EV manufacturer is valued at approximately $ 20 billion in company value, according to a press release from Gores Guggenheim.
Under the terms of the deal, about $ 800 million will come from Gores Guggenheim’s trust account with an additional $ 250 million from private equity investments through “top-level institutional investors.” In April, Polestar announced $ 500 million in funding from a group of long-term investors. Existing investors in Polestar include Volvo Car Group and actor Leonardo DiCaprio.
Following the conclusion of the agreement, which is expected to close in early 2022, Polestar will join the highly controversial market for listed EV companies under the name PSNY. The company currently has two vehicles in production, Polestar 1 and Polestar 2, which use a hybrid and fully electric driveline, respectively.
With two separate models already on the way, Polestar has a clear advantage over many of its potential competitors in the entire EV market. Lucid Group Inc. (LCID, Financial), which recently hit the public market, is expected to become a top competitor to EV giant Tesla Inc. (TSLA, Financial), but has not delivered any vehicles at this time. Where Lucid must use cash to develop its factory and supply lines to keep pace with demand, Polestar is already well established.
In 2020, the company delivered approximately 10,000 vehicles to customers in Europe, North America and Asia. In its 14 different markets, it expects to increase deliveries to 290,000 vehicles per year. The drastic increase in deliveries would place the company well above the current delivery numbers for many of the Chinese EV manufacturers, but would only be on a par with Tesla’s quarterly deliveries.
In line with the drastic increase in vehicle deliveries, Polestar will debut a completely new SUV in 2022 and expects to have two more models on the market in 2024. The company aims to be in 30 different markets by the end of 2022. The new SUV, called Polestar 3, will be produced in South Carolina at Volvo’s plant in Ridgeville.
Where the company really exceeds its competitors is through its sustainability initiatives. At present, Polestar offers a complete account of tracking the carbon footprint of its latest raw material models through vehicle life. This enables consumers to understand the effects of their purchases in addition to cost savings.
In addition to this information, the company operates China’s first LEED (Leadership in Energy and Environmental Design) gold-certified factory in Chengdu. The factory produced the company’s Polestar 1 model with almost completely renewable energy. The only fossil fuel used came from natural gas to heat glue-curing furnaces.
On the afternoon of 27 September, Gores Guggenheim (GGPI, Financial) was traded at $ 10.46 per share, an increase of 4.76%, with a market value of $ 1.05 billion.