Volvo Cars subsidiary Polestar is nearing a deal to go public through a merger with blank-check firm Gores Guggenheim at a valuation of $20 billion including debt, according to people familiar with the matter.
That figure matches the reported valuation of Volvo, which plans to list on the Stockholm stock exchange this year. It is also double the value of Renault Group.
Other electric vehicle startups that that are already on the market include U.S.-based Lucid Motors, which is also positioning itself as a premium EV maker, had a market capitalization of $40.7 billion as of Friday. Among recent Chinese market entrants, Nio has a valuation of $58 billion, XPeng is valued at $30.2 billion and Li Auto at $27.4 billion.
Polestar, which is co-owned by China’s Geely and Volvo, could announce its plan to go public as soon as Monday, the people said.
The terms or timing of a final agreement could still change, the people said.
A representatives for Gores Guggenheim declined to comment. A spokesperson for Polestar didn’t immediately respond to a request for comment.
Polestar raised $550 million in external funding in April and announced plans in June to build the Polestar 3 electric SUV at Volvo’s U.S. plant in South Carolina starting in the second half of 2022.
Polestar says it’s on track to double its global retail locations to 100 this year and the believes having 200 locations in 2022 is within reach.
“It’s highly possible with the market expansion we are looking at,” Polestar global sales boss Mike Whittington told Automotive News Europe in July.
The Tesla challenger has positioned the Polestar 2 as a direct rival to the Tesla Model 3.
Gores Guggenheim, led by Chairman Alec Gores and CEO Mark Stone, is sponsored by affiliates of Gores Group and Guggenheim Capital. It raised $800 million in a March initial public offering.
Reuters and Bloomberg contributed