Volvo’s Polestar to go public, valued at $20 billion

Polestar, the electric-carmaker controlled by Volvo Car AB and its owner Zhejiang Geely Holding Group Co., has agreed to go public through a merger with blank-check company Gores Guggenheim Inc.

The transaction will imply a $20 billion enterprise value, Polestar said in a statement Monday, confirming an earlier report by Bloomberg News. The deal will bring in about $800 million of cash from Gores Guggenheim and $250 million from institutional investors.

Based in Gothenburg, Sweden, Polestar is a rival to Tesla Inc. and EV maker Lucid Motors. The company’s second vehicle and first all-electric car, the Polestar 2, started production in March at Geely’s plant in Luqiao, China. In June, the company said the Polestar 3 -- an SUV -- will be built in Ridgeville, South Carolina, in a plant opened by Volvo Cars in 2018.

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Gores Guggenheim, led by Chairman Alec Gores and Chief Executive Officer Mark Stone, is sponsored by affiliates of Gores Group and Guggenheim Capital. It raised $800 million in a March initial public offering and expects to close the deal with Polestar in the first half of next year.

Polestar doesn’t disclose exact sales figures, but deliveries of the Polestar 2, which went on sale in the U.S. in late 2020, are “in the thousands" there and “tens of thousands" worldwide, a spokesman said in June.

Starting at $49,900 for the dual-motor version, the Polestar 2 has to contend with a 27% tax in the US because it’s produced in China; a single-motor version priced at $45,900 will arrive this fall. Pricing for the Polestar 3 hasn’t been disclosed, though it will likely cost more because it’s larger and more luxurious.