On Friday, the EV market received a jolt as Swedish electric performance carmaker Polestar began trading on the Nasdaq after going public via a SPAC transaction. Shares, trading under the ticker “PSNY,” opened the trading day valued at $13.30 but sank to less than $11 as of midday.
Polestar is the latest high-profile company to go public during a rather tumultuous time on the market—and also to do so using a SPAC deal. Sustainable consumer-products company Grove Collaborative likewise went public a week ago. But Polestar, which itself was spun off from its parent company, Volvo, is among a slew of other EV makers that have gone public in recent years, such as Rivian, Fisker, Nikola, and Lordstown Motors.
“By 2025, we aim to be selling 290,000 cars per year, 10 times as many as we sold in 2021,” said Thomas Ingenlath, CEO of Polestar, in a press release. “We already have a real and successful business; this listing gives us the funds and platform to help deliver our ambitious future plans and drive industry-leading sustainability goals forward.”
Here are a few things to watch as Polestar begins trading:
- The company faces stiff competition
A big question is whether Polestar can stake out sufficient market share to remain viable in the years ahead, as bigger automakers increase their own EV offerings. GM, for example, plans to have 20 EV models available in the U.S. by 2025, and will completely electrify. Ford, too, is leaning into EVs with its F-150 Lightning and Maverick pickup trucks. Honda, Toyota, Volkswagen, and others are beefing up their EV lineups, too. In short, a competitive market is about to get even more competitive.
- It has some momentum
There are many things going Polestar’s way as it goes public. The company recently announced that it has received 32,000 global orders year to date for the Polestar 2, an increase of 290% year-over-year. It also recently announced a partnership to sell 65,000 vehicles to Hertz. The Polestar 3 SUV, a new model, is scheduled to launch this fall, too. The rubber is hitting the road, so to speak, for Polestar, which may help it keep momentum even as the overall economy slows—something that could potentially slow auto sales.
- It may also have a secret advantage
The Polestar badge is associated with high-performance vehicles, and Volvo itself has garnered a reputation for safety and reliability among consumers. So, with plenty of competition in the EV space, Polestar may have a built-in advantage with Volvo DNA, and vehicles that can immediately catch the attention of safety-minded prospective EV owners. While consumers may still be learning about Rivian or Nikola, many, if not most, people are familiar with Volvo, which may give Polestar an immediate edge in the market.