Polestar’s shares have begun trading on the Nasdaq under the ticker PSNY. It plans to use the proceeds of the SPAC (a merger with a special purpose acquisition company) deal to fund a global expansion.
The EV maker’s shares ended at $13.00, up 15.8% from the SPAC’s final closing price.
Polestar CEO Thomas Ingenlath said the company will use the $890 million raised from the deal to fund its three-year plan to build new vehicles and eventually become profitable.
Polestar, which began as a joint venture between Sweden’s Volvo Cars and Chinese auto giant Geely in 2017, has now progressed beyond startup status.
SPAC deals have become a more popular way for companies to go public in recent years. The disclosures required are simpler than those in a traditional initial public offering. Unlike in a traditional IPO, companies participating in a SPAC merger are allowed to present forward-looking projections to investors, which can help justify a lofty valuation. But there’s no guarantee that those forecasts will come true.
Polestar could have several advantages over competitors. Volvo Cars still owns 48% of the company, and Polestar already has more than 55,000 vehicles on the road in China, Europe and the U.S. It has a factory up and running in China and an assembly line set to begin production later this year in a South Carolina factory shared with Volvo.