Swedish electric car maker Polestar has become the latest startup to go public, with plans to raise $850 million through the sale of its stock. But, as with many of its predecessors, the company found its spot on the NASDAQ after merging with a special-purpose acquisition company, or SPAC.
A SPAC is a firm that is purely there to raise capital through a public offering - it has no commercial operations whatsoever. In the past, other EV startups have turned to these organizations to help boost their capital. But after the initial offering, stock prices have sometimes struggled after the companies ran into issues.
Making the decision to turn to SPACs to launch on the stock market has been a bit of a red flag for EV startups in the past. That’s because these arrangements allow firms to skip disclosures that they would normally have to announce, as was the case in the recent failure that is Nikola.
But the big difference between Nikola and Polestar is that the latter actually has cars on the road, more than 50,000 of them, to be exact. And, it’s also the brainchild of a partnership between Volvo and Geely.
So, fingers crossed, it shouldn’t run into the same kind of gremlins as other EV startups might.
But with such high-profile backers, why has Polestar gone public anyway? Well, the firm has some pretty ambitious goals, which the funding raised through this sale should help support.
Thomas Ingenlath, CEO of Polestar, said: “We will now open a new chapter in our story that can be summarized in one word – growth. By 2025 we aim to be selling 290,000 cars per year, 10 times as many as we sold in 2021.
“We already have a real and successful business; this listing gives us the funds and platform to help deliver our ambitious future plans and drive industry-leading sustainability goals forward.”
That’s some lofty ambitions for the Swedish firm. And there’s more, as Polestar will also launch its first SUV later this year and aims to debut two other models before the end of 2024. Those new models will include the Polestar 5, which looks like it’ll be a stunning EV when it launches.
Under the listing, Polestar will trade under the ticker PSNY on the U.S. stock market. The listing comes about following the company’s merger with Gores Guggenheim, Inc., a special purpose acquisition company.