According to the Wall Street Journal, Polestar is currently working on a deal to go public by merging with a special-purpose acquisition company (SPAC). The Swedish electric vehicle (EV) maker is in advanced talks with Gores Guggenheim Inc., an SPAC that has reportedly valued the former at $21 billion USD.
Polestar is a high-performance, all-electric subsidiary of Volvo Car Group, and both are owned by China’s Zhejiang Geely Holding Group Co. The deal between Polestar and Gores Guggenheim could be finalized as early as Monday, reported people close to the proceedings.
The Volvo subsidiary aims to cement itself as a direct competitor to Tesla, the EV industry’s ‘top dog’, but the road so far has been tumultuous at best. Polestar’s flagship production car, the Polestar 2, launched to underwhelming sales, and every single unit had to be recalled due to faulty components soon after.
The Swedish EV manufacturer is working on turning things around, though — Polestar launched long range and dual-motor long range variants of the Polestar 2 earlier this year, and will be entering nine new markets by year’s end.
Polestar raised $550 million USD from new investors back in April. Under the special-purpose acquisition deal, the automaker’s existing investors, including Oscar-winning actor Leonardo DiCaprio, will receive an additional investment of $250 million USD.
An SPAC is a publicly-traded company with no business of its own, set up specifically to acquire private companies and take them public by association. Merging with an SPAC allows private companies to bypass the typical IPO process, gaining a public listing without any of the hassles or wait time.
A number of other EV companies have chosen to go public via the SPAC route recently, including Lucid Motors, which was valued at $24 billion USD at the time of acquisition, Nikola Corp., EVgo, Proterra, Canoo Inc., and more.
Gores Guggenheim is backed by private equity firm The Gores Group LLC, as well as investment bank and asset management firm Guggenheim Partners. The SPAC raised around $800 million USD during its IPO back in March, and has reportedly been in talks with Polestar since July.
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