Polestar

Polestar was supposed to be one of the 'safe' EV SPACs. Backed by Chinese auto giant Geely (which also owns Volvo), Polestar had real manufacturing capacity, a growing lineup of vehicles (Polestar 2, 3, 4), and access to Volvo's global dealer network. The company merged with Gores Guggenheim in June 2022 at a $20 billion valuation.

The fundamentals were better than most EV SPACs. Polestar sold over 50,000 cars in 2023 — far more than most competitors. The Polestar 2 earned positive reviews, and new models were in development. The Volvo/Geely parentage provided manufacturing and engineering credibility.

But even with real cars and real sales, Polestar bled money. Each vehicle sold at a loss, and the company required continuous capital infusions. Competition from Tesla's price cuts, Chinese EVs flooding European markets, and a slowdown in EV demand growth all squeezed Polestar's already-thin margins.

The stock collapsed from $13 to $0.21 — a 98% decline — without even requiring a reverse split. Geely's support has kept Polestar alive, but at its current price, the company's market cap has fallen below $1 billion for a carmaker that sells 50,000+ vehicles annually. It's the clearest example of how even legitimate EV companies were wildly overvalued in the SPAC era.