EV Maker Polestar — Said To Be In SPAC Talks For US Listing — Raises $550M

Polestar, the premium Swedish electric car company owned by Volvo Cars Group and China’s Zhejiang Geely Holding Group Co GELYF said on Thursday it has raised $550 million from a group of long-term financial investors and is in talks with global investors to raise more funds.

What Happened: Polestar said it has raised funds from a range of external investors that include  China’s Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding, and Zibo Hightech Industrial Investment among a range of other investors.

Polestar, which was launched in 2017, has a manufacturing facility in China and launched two vehicles, the Polestar 1 and Polestar 2.

Polestar said it will use the funding to quicken its product development and technological capabilities for future cars. It said the funding comes at a time automakers around the world are ramping up electric vehicle rollout plans and rapid advancement of electric vehicle technology.

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Why It Matters: The Hangzhou-based Zhejiang Geely Group reportedly plans to list Polestar via a special purpose acquisition company in a transaction that would value the business at as much as $40 billion.

The announcement comes a day after Wall Street Journal reported Polestar is wrapping up a Series A fundraising round that will value the startup at $7 billion and it's aiming for a Series B fundraising that could boost its valuation to $20 billion by the end of June, before merging with a SPAC to go public.

Geely is playing catch-up. Rivals such as Tesla Inc TSLA, BYD Co BYDDF, and others have established themselves, while its electric brands have sold poorly in China. 

Locally, the company also faces intense competition from startups like Li Auto Inc LI, Nio Inc NIO, and XPeng Inc XPEV, which have moved faster to capitalize on the growing EV market.

Price Action: Shares of Xpeng closed 7.4% lower at $32.89 on Wednesday, Nio 3.79% lower at $37.02, and Li Auto closed 3.30% lower at $21.10.