Polestar is really making a bang in the Electric Vehicle (EV) industry, and it may soon take over Elon Musk's Tesla.
Currently, Polestar is in mass production with the Polestar 2, the company's first all-electric car. The Polestar 2 gets up to 270 miles per charge. The Polestar 3, an all-electric sports utility vehicle, is slated to release this year.
What Makes Polestar a Great Contender for Tesla and Other EV Makers?
Today, Tesla and Polestar are the only EV that has mass production and global reach. On the other hand, Polestar is currently targeting the premium EV market as well, which puts the company in direct competition with Tesla.
Aside from that, Polestar has an asset-light business model in which they use the existing production infrastructure and supply chains of Geely and Volvo Cars. Polestar also works with these automakers when it comes to research and development. Therefore, it has a huge advantage over other automakers that use significant capital to build and operate factories.
Another thing, Polestar vehicles have won honors and accolades for design and performance. Safety is also a huge consideration, and Polestar deploys autonomous driving technology in partnerships with Luminar, Nvidia, Alphabet subsidiary Waymo and Zenseact.
Also Read: Polestar Begins the Delivery of 'Polestar 2' EVs to Hertz
Stocks are Troublesome
Despite Polestar's advantages over Tesla, its stock is worth watching. Its stock jumped 16 percent on its first day of trading and dropped 15 percent on Monday. With that, it's only normal for a sense of skepticism to resurface.
Polestar went public following the merger with Gores Guggenheim Inc. As of Monday's close, Polestar's valuation is at $24 billion.
Speaking to Bloomberg, Matthew Haley, chief market strategist at Miller Tabak + Co., "EV stocks benefited greatly from the abundance of liquidity that had been sloshing around the system for two years. Now that this liquidity is disappearing, investors are going to have to revalue these EV names.
Aside from the volatile market conditions, there are also the increasing costs of raw materials and supply-chain shortages. Therefore, newbies to the EV industry can find themselves in a tricky situation, especially since the materials used in EV batteries have seen huge inflation that forces a lot of companies to raise the price of their expensive vehicles even more.
Hope for the Future: The Polestar 5
Despite the stock troubles Polestar recently had, it still remains to be hopeful. Polestar is already preparing the debut of the Polestar 5, which is meant to compete with EVs from Porsche, Tesla, and Lucid. The Polestar 5 prototype was revealed at this year's Goodwood Festival of Speed.
Related Article: Polestar Debuts New Updates to its EV Utilizing Blockchain to Combat Carbon Emissions
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Written by April Fowell
