Volvo-backed Electric Brand Polestar in Talks to go Public via a SPAC Deal, Sources Say
Polestar, the new electric performance brand of Volvo Cars and its parent company Chinese automaker Zhejiang Geely Holding Group Co (Geely), is in talks to go public through a merger with Gores Guggenheim Inc., a blank check-firm, according to people with knowledge of the matter. The plans was first reported by Bloomberg.
Shares of Gores Guggenheim rose as much as 7.7% on the news.
Representatives at Polestar, Volvo and Gores Guggenheim did not immediately respond to a request for comment.
Blank check firm Gores Guggenheim was formed by the Gores Group and Guggenheim Partners. It launched its own IPO in March where it raised $750 million. The special purpose acquisition company (SPAC) plans to leverage its management's experience to target a wide array of industries including industrials, technology and telecommunications.
Gores Guggenheim shares are listed on the Nasdaq under the stock symbol "GGPIU."
Polestar is operated by Sweden-based Volvo Cars as a standalone performance EV brand. In April, Polestar announced it raised $550 million in its first ever outside investment round.
The transaction might value the combined new company at around $25 billion, the people said. However, the people warned that no deal has been reached and it's possible terms could change or that the talks could collapse.
SPACs are shell companies formed to raise funds via an IPO to finance a merger or acquisition with a privately held company. A SPAC is generally referred to as a "blank check" company. The blank check firms are typically used by startups to attract new funding on the stock market as an alternative way to go public over a traditional IPO.
Volvo launched its upmarket electric brand Polestar in 2017. Polestar unveiled its first model, the flagship luxury-hybrid Polestar 1 in Oct 2017. Polestar revealed its mass-market Polestar 2 in Feb 2019.
At the time, the Polestar 2 was challenging Tesla, Lucid Motors, Volkswagen and others with an electric car that's more affordable than the flagship Model S, yet priced competitively with the mass-market Model 3. The Polestar 2 is rated at 400 horsepower and delivers sportscar-like performance. It can go from zero to 60 mph in about five seconds.
The Polestar 2 is also the world's first EV to feature an infotainment system powered by Google's new Android Automotive OS. Popular Google services, including Maps, Play and Assistant are embedded in the vehicle's infotainment system, so there is no need for an owner to sync their smartphone to access Google Maps or other services.
Last month, Polestar announced that its building its next vehicle, an electric/performance SUV called the Polestar 3, in the U.S. The forthcoming Polestar 3 will be manufactured at the Volvo Cars production center in Ridgeville, South Carolina.
Polstar said that all of the Polestar 3 vehicles built in South Carolina will be sold in the U.S. The electric performance Polestar 3 SUV will also feature safety-focused autonomous driving features, the company said.
In October of last year, the Polestar 2 won the Luxury category in the annual "German Car of the Year" (GCOTY) awards. Among the judging criteria are design, driving pleasure, drivetrain, handling, quality, comfort, practicality, safety, environment, infotainment and price/performance ratio.
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