Polestar share: This is how newcomer and Tesla competitor Polestar is doing so far

shares in this article

Polestar with strong IPO
Well-known partners and ambitious goals
Tesla as the only competitor

Polestar has been a public company for more than a week. The joint venture between Volvo and the Chinese Volvo owner Geely initially had a turbo start and raised 890 million US dollars at its IPO on June 24th. The opening price on the US stock exchange NASDAQ was 12.98 US dollars and thus 15.5 percent above the closing price that was determined when the SPAC merger was finalized, which Polestar chose as a route to the stock exchange. The first day of trading ended at $13.00. In doing so, the company defied both the currently mixed mood on the stock market and the weak sentiment that has been hitting car manufacturers on the market for some time.

But in the days that followed, the Polestar share was no longer able to match the strong development of the first trading day: The share certificate is currently being traded at 9.38 US dollars (closing price on July 1, 2022) and thus around 25 percent below the initial price.

Started as a competitor of Tesla

The joint venture between Volvo and Geely has set out to take market share from market leader Tesla in particular. “Polestar and Tesla are currently the only EV pure plays with mass production and global reach,” said the stock market newcomer before the start on the trading floor.

Accordingly, the money from the IPO is also to be used to open up additional regions and bring new vehicle models onto the market in order to reduce the gap to the market leader Tesla. “We will now open a new chapter in our history that can be summed up in one word: growth. By 2025 we want to sell 290,000 cars a year, ten times more than in 2021. We already have a real and successful business; this one Going public gives us the means and platform to execute our ambitious future plans and advance our industry-leading sustainability goals,” said Polestar CEO Thomas Ingenlath in a company press release.

That’s how business works at Polestar

Unlike some other electric car entrants that have taken the plunge, Polestar already has a viable business. Over 55,000 Polestar vehicles have already been sold, including 29,000 last year. For comparison: Tesla’s sales figures for 2021 amounted to 936,000 – so the challenger still has a long way to go. But the joint venture has formulated ambitious goals: by 2025, sales are to increase from $1.4 billion to $17.6 billion. In addition, the leap into the black is planned: after a minus of around one billion US dollars in 2021, the aim is to achieve EBIT of 1.8 billion US dollars by 2025 and are also aiming for an operating return on sales of eight percent.

The goals are ambitious, because the company currently only has two of its own vehicles, the Polestar 1 and the Polestar 2, and only the Polestar 2 is currently being produced. The successor Polestar 3 has already been announced, when customers can place pre-orders here the company has so far covered. The last time the planned delivery was 2023, the smaller SUV Polestar 4 should also be available in the same year, and a sports coupe called Polestar 5 is then planned for 2024.

The prospects for Polestar

With Volvo and Geely, Polestar has two strong partners behind it, media appeal and financial support also comes from an early investor, the Hollywood actor Leonardo DiCaprio. This can be an advantage with regard to the expansion of the product range as well as in sales and production.

In addition, the joint venture between Volvo and Geely has already secured a major order: The US car rental company Hertz wants to buy up to 65,000 electric cars from Polestar for its international fleet over the next five years.

In addition, Polestar has hardly any direct competition next to Tesla, because listed pure electric car manufacturers who are already in mass production are rare Satisfying demand in a difficult competitive environment can cost market leader Tesla market share. Most recently, however, Polestar had been troubled by the supply chain situation and the lockdown situation in China, where the only two Polestar factories are located. The result was a lowering of the original sales forecast for the current fiscal year: Instead of bringing 65,000 vehicles to the public, the EV group now only expects a delivery figure of 50,000.

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