On Friday, the EV market took a shock as a Swedish electric car manufacturer North Star began trading on the Nasdaq after it went public through a SPAC transaction. Shares, trading under the ticker “PSNY,” opened the trading day at $13.30, but fell below $11 as of noon.
Polestar is the latest high-profile company to go public during a rather tumultuous time in the market – and to do so with the help of a SPAC deal, too. Sustainable consumer products company Grove Collaborative also went public a week ago. But Polestar, which itself was spun off from parent company Volvo, is among a slew of other EV makers that have gone public in recent years, such as Rivian† Fisker† Nikolaand Lordstown Motors.
“By 2025, we aim to sell 290,000 cars a year, ten times what we sold in 2021,” said Thomas Ingenlath, Polestar CEO, in a press release† “We already have a real and successful business; this listing gives us the resources and platform to help realize our ambitious plans for the future and advance industry-leading sustainability goals.”
Here are a few things to keep an eye on when Polestar starts trading:
- The company faces fierce competition
A big question is whether Polestar can capture enough market share to remain viable for years to come, as larger automakers increase their own EV offering† For example, GM plans to have 20 EV models available in the US by 2025, and will fully electrify. Ford also relies on EVs with its F-150 Lightning and Maverick pickup trucks. Honda, Toyota, Volkswagen and others are also bolstering their EV ranges. In short, a competitive market is about to get even more competitive.
- It has some speed
There are a lot of things going Polestar’s way when it goes public. The company recently announced that it has received 32,000 global orders for the Polestar 2 to date, up 290% year-over-year. It’s also recently announced a collaboration 65,000 vehicles to be sold to Hertz. The Polestar 3 SUV, a new model, is scheduled for launch also this fall. The rubber is getting on the road for Polestar, so to speak, which could help maintain momentum even as the overall economy slows — something that could potentially slow car sales.
- It may also have a secret benefit
The Polestar badge is associated with high-performance vehicles and Volvo has built itself a reputation for safety and reliability among consumers. So, with a lot of competition in EVs, Polestar may have a built-in advantage with Volvo DNA and vehicles that will immediately grab the attention of future EV owners who are focused on safety. While consumers may still be learning about Rivian or Nikola, many if not most people are familiar with Volvo, which could give Polestar an immediate edge in the market.