Polestar, Volvo’s EV-only subsidiary, is ready to go public at a valuation of $20 billion. The company delivered just 10,000 vehicles in 2020 but has an aggressive expansion plan that could boost sales to almost 300,000 by 2025.
While the $20 billion valuation is less than the $30 billion suggested by some industry sources earlier this month, it would make the Swedish company worth twice as much as Renault Group, according to Automotive News. Renault Group shifted over 2.8 million vehicles in 2020.
The deal involves Polestar merging with Gores Guggenheim, a Spac (special purpose acquisition company) backed by Alec Gores, a private equity investor, and Guggenheim Capital. With the merger complete, the resulting company, due to be named Polestar Automotive Holding UK Limited, will be list on Nasdaq.
Polestar isn’t the first EV maker to go public, but it does have credibility lacking in some other electric car companies. While some, like Lordstown and Nikola, looked great on paper, they achieved high values despite being yet to deliver a car. But Polestar is a fully functioning carmaker and known quantity ready to scale.
Related: 2023 Polestar 3 SUV Based On The Next Volvo XC90 Will Get A “Unique” Powerful Powertrain
The merger nets the new company some serious investment, including $800 million from Gores Guggenheim and $250 million from other investors. That money will be used to expand Polestar’s product range over the next few years. Its sole current offering is the Polestar 2 crossover sedan.
The Polestar 3, an XC90-sized SUV, lands next year, and the company is also working on a production version of the striking Precept sedan revealed in concept form in 2020. A third vehicle, most likely another SUV designed to fit below the Polestar 3, is also in the works.
Polestar is, or was, co-owned by Volvo and Volvo’s parent company Geely. It sold its first car in 2019 and is looking to expand its market coverage from 14 to 30 markets. Volvo is also planning to go public in the near future.
