Automobil: Sweden’s Polestar is entering the stock market frenzy of electric car makers

Automobil: Sweden’s Polestar is entering the stock market frenzy of electric car makers

About 10,000 cars were sold last year, and the market value is greater than that of Subaru: Sweden’s Polestar, which announced on Monday its future IPO for an impressive amount of 20 billion US dollars, confirms the increasing value of electric car manufacturers , as champion Tesla. .

The owners of Polestar, the Swedish company Volvo and the Chinese company Geely, will soon introduce it to Wall Street. This smaller European competitor to Tesla, which counts actor Leonardo DiCaprio among its shareholders, has sold just two models since its creation in 2017 and in 2020 sold just 10,000 of its Chinese-made luxury cars.

This huge rating would put the brand ahead of Renault, Tata Motors or Subaru.

The stock market value of car manufacturers is dominated by Tesla, with a valuation that has exploded since 2019 to reach more than 767 billion dollars, ahead of Toyota and Volkswagen, still the world’s leading manufacturers in the number of cars.

About a dozen new developers have gone public: the Start it American Lucid and Chinese companies NIO and Xpeng are also at the top, neck and neck with their ancestors Ford, Ferrari and Hyundai. California truck manufacturer Rivian, backed by Ford and Amazon, is expected to join them soon with a large capital.

“The transition to electric vehicles is generating a lot of interest from the markets,” says analyst Alexandre Marian, from AlixPartners. “In some cases, very high calculations showed that the growth trend would be faster than that of Tesla. But the risk is high. You have to admit that it is very difficult to develop as a car manufacturer. Many have broken their teeth,” emphasizes the expert.

China’s Li Auto, which raised $1.1 billion when it went public on the Nasdaq in 2020, saw its shares fall when it went public in Hong Kong in August 2021, amid Beijing’s tightening of controls on tech companies. In the US, Lordstown Motors announced in June that it was running out of money to produce its electric pickup truck on a commercial scale; its manager later resigned after reports surfaced admitting that the company had made incorrect statements about some of the previous orders.

In the auto industry, “fixed costs are very high,” says Jessica Caldwell of Edmunds. Not only do you need a large factory, you also need to set up an entire supply chain for many car parts.

Rapid expansion

Polestar offers “the transformation of a young company” while taking advantage of “Volvo’s industrial heritage and expertise”, the brand’s boss, Thomas Ingenlath, claimed in front of investors on Monday. “Proceeds from the suit will be used to fund major investments in models and expansion of operations and markets,” Polestar said in a statement. The brand plans to be profitable from 2023.

Polestar, Volvo’s former sports brand, became a full-fledged manufacturer in 2017. The company is aiming for around 290,000 sales a year in 2025 and hopes to be present in 30 countries by 2023, its executives said. To get there, Polestar plans to launch one vehicle per year: a “luxury and sporty” SUV in 2022, followed by a luxury sedan. The Swede intends to rely on online sales and a few stores in metropolitan areas, but also Volvo’s after-sales network.

Its rating will be made through a merger with the entire company, Gores Guggenheim, funded by two American investment funds. The value of $20 billion corresponds to three times the targeted sales in 2023 and 1.5 times the expected sales in 2024, notes the group. The transaction is expected to be completed in the first half of 2022, and a listing is expected on Nasdaq.

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