Polestar goes public: why the electric car manufacturer is not afraid of a spac flop

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Top or crash pilot?

Polestar boss Thomas Ingenlath now has to prove himself on the stock exchange

Photo: Jan Hetfleisch / Getty Images

Polestar kept its word.

Despite the unrest on the market, the electric car manufacturer stuck to its plans to go public in the first half of 2022.

On Friday the time had come.

After a space deal with the shell company "Gores Guggenheim", the brand is now listed on the Nasdaq in New York with the ticker symbol "PSNY".

Polestar had already announced the merger with the investment company of US billionaire

(69) in September 2021.

Now the process is complete.

The IPO brings Polestar around 850 million US dollars into the coffers.

As a result, the carmaker had to accept slight cutbacks, in May he had hoped to be able to earn almost one billion dollars.

Polestar initially expected a valuation of around $20 billion - so the company is in similar spheres as parent company Volvo ($21.7 billion).

Polestar shares opened Friday at $12.98, up 15.5 percent from the closing price at Thursday's Spac finalization.

The imagination for e-car brands as stock market stars seems to be still there.

Recently, however, the mood around the industry had clouded over.

Newcomers such as Rivian (-78%) or Lucid Motors (-50%) have had to accept massive price losses in the last six months.

Is Polestar also threatened with a crash?

In any case, the timing is daring.

Corona pandemic, raw material and delivery bottlenecks, war in Ukraine, inflation, fears of recession - "There hasn't been such a difficult first half of the year for decades," says

, auto analyst at Bankhaus Metzler.

Providers of premium and luxury goods in particular have suffered badly recently.

An environment in which Polestar also operates.

He can understand that it is difficult to stop the process once the IPO has been pushed.

"But in the current situation, I would have waited until next spring and postponed the start. Everyone would probably have understood that," said Pieper.

The company tries to brush aside such concerns.

Unlike some competitors, a functioning production can be proven, said Polestar boss

(58) recently.

"We are already running a real and successful business," he emphasized on Friday.

Over 55,000 cars from the brand are already on the road.

With Volvo Car and the Chinese car giant Geely, Polestar can also count on partners with deep roots in the industry.

The two car companies founded Polestar together in 2017.

Up until Volvo Car's IPO last fall, Geely held 98 percent of the shares in the Swedish carmaker after taking over Ford in 2010.

Today, 84 percent are still owned by companies belonging to Geely.

This means that Polestar is actually a Chinese company - with a distinctly Swedish touch.

The head office is in Gothenburg, and the branding is very keen on the supposedly Swedish homeland.

The cars in the widespread marketing images regularly drive through landscapes with mountains, lakes and snow.

The German CEO Ingenlath also stands for the European touch.

As a designer, he once drew vehicles for the Volkswagen Group for over 20 years.

But the Chinese have the last word at Polestar.

Volvo Car and Geely each hold a little less than half of the shares in the brand.

The rest belongs to financiers, mainly from China and South Korea, in the electric car manufacturer, but the best-known individual investor is US actor

(47).

In its investor presentation, Polestar boasts that it is currently the only pure electric car manufacturer with a global approach, alongside Tesla.

But you can't seriously compare the brand with the top dog from California.

While Tesla delivered a good 936,000 vehicles worldwide last year, Polestar delivered 29,000.

The goals are ambitious, for 2025 the manufacturer has set itself 290,000 new cars.

Sales are expected to grow from $1.4 billion last time to $17.6 billion in the same period.

In 2021 Polestar still made a loss of around one billion euros, in 2025 the brand wants to achieve an EBIT of 1.8 billion dollars and an operating return on sales of 8 percent.

Sales forecast for 2022 cashed in

It is questionable whether the plans can be kept.

In the first quarter of 2022, Polestar was able to double its sales figures to 13,600 units compared to the same period last year.

However, the manufacturer recently corrected the original plan of delivering 65,000 cars for the full year down to 50,000.

Polestar has recently been particularly affected by the tense corona situation in China with several lockdowns.

So far, the manufacturer has only produced in two plants in Taizhou and Chengdu.

With the two models Polestar 1 and 2, the product portfolio is manageable.

The brand's first model, a hybrid, has also not been built since the end of 2021, after only 1500 copies it was over.

After all, the story of the real electric pioneer should be told.

With plenty of pathos, Polestar announced on Friday: "We are retiring our first ambassador, the car that started it all, the Polestar 1. But that's not the beginning of the end. It's just the end of the beginning."

In addition to the Polestar, two other models will be used in the future.

A few weeks ago, the brand published the first images of an SUV - of course with the name Polestar 3.

That vehicle will be built at Volvo's US plant in Ridgeville.

But when you start, there is obviously a problem.

Insiders recently reported to manager magazin about massive production problems around Volvo, some models are even said to be "on hold".

The manufacturer intends to present the Polestar 3 in autumn, but a market launch is not expected before spring 2023.

Another, smaller SUV, the Polestar 4, should be ready to go as early as autumn 2023, and the brand has also announced a sports coupé (Polestar 5) for early 2024.

This requires a lot of money, further rounds of financing could be necessary, even if Ingenlath said on Friday: "The IPO gives us the means and the platform to implement our ambitious plans for the future."

But it's not just in production that things aren't running smoothly, sales are also causing problems.

By the end of 2023, the number of markets in which the brand offers vehicles should increase from the current 25 to 30.

Polestar relies heavily on digital sales channels, there are no plans for classic dealer networks.

The brand only occasionally works with retail partners. In Germany, for example, there are seven stores in the most expensive city locations.

In addition, Polestar is experimenting with other sales formats such as "Destinations" in shopping centers, "Experience Centers", "Testdrive Hubs" or "Handover Centers".

Many of the previous customers are said to have come to Polestar from German premium brands such as Audi or BMW - and they are often not as digitally affine as the newcomer imagined.

In Germany, the average Polestar customer is over 50 years old and more used to stationary premium service than over-the-air updates.

Polestar caused a stir in April with one of the biggest electric car sales deals to date.

Car rental company Hertz ordered up to 65,000 cars from the brand over the next five years.

About two weeks ago, Polestar announced that it would now begin deliveries.

A business that Thomas Ingenlath could use to calm the doubters before the IPO.

With the money he has collected, he has now continued to breathe.

A moment, according to the CEO, "that the entire Polestar team can be proud of".

Next Tuesday (June 28) Ingenlath will ring the opening bell on Wall Street in New York.

The former car designer should be really proud if he should actually herald a successful price rally in the current environment.