GGPI Stock is a Differentiated SPAC EV Play That’s Miles Ahead
It looks like there’s a strong narrative brewing around Gores Guggenheim (NASDAQ:GGPI) stock currently. Multiple factors are coming together to make it a worthwhile SPAC EV stock.
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There are a few things to be aware of which relate to demand. On the one hand, the omicron variant has taken a toll on the entire stock market. But at the same time, SPAC EVs appear to have come back into fashion.
Given that Gores Guggenheim is bringing premium EV maker Polestar public, now may well be the time to buy. Prices are low, but demand looks strong and Polestar isn’t any ordinary SPAC EV.
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Differentiated SPAC EV
Polestar CEO Thomas Inglenath explained the fundamental difference at a recent conference:
We are not a virtual company waiting to build factories and sell cars; we are an actual company already building and selling cars around the world. Our two award-winning cars are on the road in 14 markets globally and we expect our global sales volume to reach around 29,000 vehicles this year.
His first point is an important one. Most of the SPAC EVs that garnered loads of attention last year were pre-production. The funds that the SPAC provided were earmarked for the buildout of an actual vehicle. Polestar is already producing vehicles. In this case the SPAC proceeds will be directed toward expansion of an already existing lineup of vehicles.
That 29,000 vehicles anticipated to be sold this year is set to rapidly increase. In fact, Polestar expects it to rise by a factor of 10 quickly, reaching 290,000 by 2025.
The flurry of SPAC EVs in 2020 has led to some early successes already. Lucid (NASDAQ:LCID) is producing vehicles and it looks like an early success. Likewise, Fisker (NYSE:FSR) appears to be on the right track.
Both began as “virtual companies waiting to build factories and sell cars,” as CEO Thomas Inglenath alluded to. That makes them fundamentally different from Polestar.
But Polestar certainly aims to take advantage of the same burgeoning U.S. EV market as Lucid and Fisker.
U.S. Market
Polestar has announced plans to build its first SUV and U.S. manufactured vehicle in the coming year. The premium SUV will be built in Charleston, South Carolina and is set to launch sometime in 2022.
The marketing of the vehicle is heavily playing up its climate-responsible sourcing, perhaps unsurprising given its Volvo (OTCMKTS:VLVLY) roots.
The other interesting aspect of the Polestar 3 SUV is that it will utilize LiDAR from Luminar (NASDAQ:LAZR), and chipsets from Nvidia (NASDAQ:NVDA).