Electric vehicle maker Polestar has gone public via a merger with Gores Guggenheim, a special purpose acquisition company, or SPAC.
The $890 million raised from the transaction will fund Polestar’s three-year plan to build new vehicles and become profitable, according to Chief Executive Officer Thomas Ingenlath. The company began in 2017 as a joint venture between Volvo Cars and Chinese automaker Geely.
“We go public as an operating and successful business—not to raise capital to build a business,” Ingenlath told CNBC in a recent interview. “It’s because the next three years will be super-fast growth, the company is geared up for that with the product portfolio.”
Of late, there have been other SPAC mergers with electric vehicle companies, though investors haven’t been happy. Although Lucid Group, Fisker, and Nikola have been the most successful of the ventures, they are still currently trading at 67%, 69%, and 92% below their post-merger highs, respectively. Rivian, an electric truck maker that went public in a traditional IPO, has also struggled, with shares down 84% from its post-IPO high.
Polestar may be in a better position, as Volvo Cars still owns 48% of the company, and Polestar has more than 55,000 vehicles on the road in China, Europe, and the U.S. A factory is operating in China and an assembly line will begin production later this year in South Carolina.
Polestar’s three-year plan includes three new vehicles: a large SUV (the Polestar 3), a midsize crossover (the Polestar 4), and a large sedan (the Polestar 5). All will be fully electric and available and built in the U.S., Europe, and China. By the end of 2025, Ingenlath expects annual sales to reach about 290,000 vehicles.
Ingenlath also said Polestar wants to operate sales and service in 30 countries by next year and turn profitable before 2025.
Since January, Polestar has received more than 32,000 orders from 25 different countries for the Polestar 2. And, the rental-car leader Hertz has ordered 65,000 vehicles spread out over the next five years.