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Polestar expects to ship 50,000 electric vehicles in 2022 and 124,000 in 2023.
Courtesy of Polestar
Polestar, the elusive electric vehicle company
Volvo car
,
should start trading on Friday with a huge corporate value.
Polestar has agreed to merge with a special purpose acquisition company or SPAC,
Gores Guggenheim
(GGPI) in September 2021. Now the merger process is almost complete. The deadline for shareholders to vote for the merger is Thursday and, if all goes as expected, Polestar will negotiate on Friday.
Investors holding Gores will end up owning Polestar with the new PSNY stock symbol.
The deal values Polestar at about $ 21 billion based on the approximately 2.1 billion shares outstanding since the deal closed. That’s about $ 20 billion net of the $ 1 billion that the merger will bring to Polestar books.
This corporate value is greater than
Rivian
Car (RIVN). Rivian’s market capitalization is about $ 27 billion, but the value of Rivian’s business – the market capitalization adjusted for cash and debt – is about $ 12 billion.
The market treats Polestar like a serious EV player. There are some good reasons for this.
For a start, the company is shipping cars. Polestar shipped about 13,600 units in the first quarter. It expects to ship 50,000 units in 2022 and 124,000 EVs in 2023. Rivian, by comparison, expects to deliver around 25,000 vehicles in 2022 and 86,000 vehicles in 2023.
Polestar also has two production facilities in China. One is located in Taizhou, Zhejiang Province, and another in Chengdu, Sichuan Province. The Taizhou plant was acquired by Volvo (VOLCARB.Sweden) by Geely in December 2021.
Geely-affiliated entities hold approximately 84% of Volvo Car shares. Volvo Car listed on the Swedish stock exchange is still traded separately.
Volvo Car owns approximately 48% of Polestar. Its share amounts to about $ 10 billion. By clearing the Polestar value from Volvo Car, its shares are trading at about 8.5 times the estimated 2022 earnings.
Volkswagen
The stock (VOW3.Germany), for comparison, trades about 4.4 times the estimated earnings of 2022.
Gores shares are about $ 10 per share in trading late Tuesday. This is the same price at which the merger agreement was reached. This is not a bad thing considering what has happened to EV valuations in recent months.
Tesla
The stock (TSLA) fell about 8% from the end of September, in a corresponding period. The
S&P 500
decreases by about 15% and the
Nasdaq Composite
has fallen 26%.
The Polestar share, after the merger, will trade with approximately 3 times the estimated sales of 2023.
This multiplier is at the top end of the line among EV startups worth over $ 10 billion. Multiple Polestar is better than Rivian as well
ΝΙΟ
(NIO),
Li Auto
(LI) and
XPeng
(XPEV). It is not as high as
Clear
(LCID).
The leader of EV Tesla trades with about 6.4 times the estimated sales of 2023, amounting to about 116 billion dollars.
Write to Al Root at allen.root@dowjones.com
