Polestar Is an Intriguing Pick Out of the Electric Vehicle Crowd
Gores Guggenheim (NASDAQ:GGPI) is a special purpose acquisition company (SPAC) that has announced a deal: it intends to buy Polestar, an electric vehicle (EV) firm based out of Sweden. As investors warmed up to this deal, GGPI stock had rallied significantly from the opening $10 SPAC share price. However, the recent market dip has sent GGPI stock back down to the $12 level.
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The company hopes to complete its SPAC merger process in the first half of 2022. Once completed, the company will be known as Polestar and trade under the PSNY ticker on the Nasdaq exchange.
So, why should investors give Polestar and GGPI stock attention amid the crowded field of EV companies? There are a few reasons.
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Polestar Has a Strong Operating Business
At this point, just being an EV company doesn't merit much attention. We've had what seems like a million different electric vehicle companies debut their shares over the past 18 months. The novelty factor is long gone. So, what does Polestar bring to the table that makes it stand out in this highly competitive sector?
Actually, the company brings quite a lot. For one thing, Polestar is already well into commercial production. The company delivered around 10,000 vehicles in 2020 and will finish 2021 with a substantially higher figure. Further, it has already topped $1.6 billion in revenues for 2021.
Polestar is much closer to a firm like Xpeng (NYSE:XPEV) in that it's delivering a meaningful number of cars to customers and generating solid revenue figures. It's much more than a prototype and a Microsoft (NASDAQ:MSFT) PowerPoint presentation, unlike many other EV firms that came public this year.
Pedigree and a Full-Scale EV Platform
How did Polestar get off to such a fast start compared to other EV names? Well, it was born out of close ties to Volvo (OTCMKTS:VLVLY). A Volvo partner created Polestar back in 1996. Volvo eventually acquired it outright. Over the years, it has become a high-performance brand for the company.
Volvo is now owned by Geely (OTCMKTS:GELYY). This gives it access to manufacturing in China along with its facilities in Europe and the United States. Polestar then has access to Volvo's infrastructure, greatly helping it speed up its time-to-market and keeping it from having to reinvent the wheel in terms of basic manufacturing.
Unsurprisingly, having Geely and Volvo at its side allows Polestar to target a far broader range of markets as well. The Polestar 1 and 2 are a top-tier sports car and a hatchback, respectively. The Polestar 3, an SUV, is expected to launch in 2022. The company has several more models in the works, too.