Polestar, the Swedish high-performance electric vehicle (EV) brand owned by Volvo Cars, was considering, among other options, a merger with a special purpose acquisition company (SPAC) to raise more capital, its chief executive said on Monday.
“There is high interest from more people and more investors [in Polestar’s next rounds of financing],” Thomas Ingenlath told the Post during the 2021 Shanghai Auto Show. “We are not decided, or fixed on any of the options. There are more options on the table [other] than a SPAC,” he said.
The Wall Street Journal reported last week that Polestar was mulling over a plan to go public in the United States by merging with a SPAC, which could eventually value the carmaker at as much as US$40 billion.
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SPACs, also known as blank-check companies, are shell firms that raise funds in an initial public offering with the aim of buying a private company. For the company being acquired, the merger is an alternative way to go public over a traditional listing.
Polestar raised US$550 million in a financing round this month led by Chinese investors Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment. South Korean conglomerate SK’s investment arm I Cube Capital also took part in the deal.
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Ingenlath said on Monday that China’s EV revolution was in danger of becoming a plaything for speculators. “What is at stake here is not how much financiers think a company is worth. But the chance to revolutionise the auto industry, turn it electric and at the same time make a huge contribution to protecting the climate,” he said. “Put against these important themes, a market valuation is a very insubstantial and meaningless marker of success.”
Polestar became a stand-alone brand in 2017 and is also part of the Zhejiang Geely Group, one of China’s largest carmakers. Geely, which is controlled by billionaire Li Shufu, owns Volvo Cars.
The company makes two models in China. Polestar 1, a luxury four-seat hybrid coupe, is priced at US$155,000. Polestar 2, an all-electric five-door fastback, is priced at 252,800 yuan (US$38,852) to take on Tesla’s Model 3.
Ingenlath said Polestar was planning to launch a new car next year, which would redefine sport-utility vehicles in the electrification age. He said this vehicle would be priced in between Polestar 1 and Polestar 2.
“We have not seen a single EV company that could mount a real challenge to Tesla on the mainland,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “Polestar can be one of the candidates to compete against Tesla in the future, but it all depends on whether Chinese customers will be impressed by its new models.”
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