Author: Chang Yan

On April 3 1998, “Titanic” was released in mainland China, and Leonardo DiCaprio, with his portrayal of the handsome young artist Jack, swept the hearts of countless young men and women.

Over 20 years later, “Little Li” has become increasingly mysterious in his way of attracting young people.

The last time I remember seeing news about him, someone analyzed the situation of all of his past girlfriends. Regardless of how the world changes, Little Li’s requirements for his girlfriends have always remained the same: young, beautiful, and energetic.

And the same standard of pursuit also applies to Little Li’s investment direction.

For example, recently, I saw him on a list of investors for an electric car company.

In fact, this is not the first time he has invested in an electric car company.

In 2009, many American entertainment reporters suddenly discovered that Leonardo would be the first owner of a new startup automaker called Fisker. After quickly finding a feeling for electric power, Leonardo soon joined the team investing in this enterprise.

However, during the harsh era of electric cars, Fisker struggled. Due to the positioning being out of touch with market needs, unstable product quality, internal team discord, and other problems, it was unable to become the twin star expected to shine alongside Tesla.

I don’t know if Leonardo made or lost money, but after facing this setback, he surely gained a qualitative improvement in his understanding of these niche market products, enterprises, and capital.

Because the electric car company I mentioned above is Polestar.

On September 27th, Polestar announced an agreement to merge and go public with Gores Guggenheim, Inc., and the two will complete the merger in the first half of 2022 in the form of a special purpose acquisition company (SPAC), to be held by a new listed company called Polestar Automotive Holding UK Limited. The company is expected to list on NASDAQ with the stock code “PSNY.”

This means that Polestar’s enterprise valuation will reach approximately 20 billion dollars, and through this rapid listing process, Polestar will also receive billions of dollars in cash that are crucial for its future development.

The majority of this money will be used for the development of key products. To understand why Polestar has such a high valuation, it is necessary to start with its key products.

What products will Polestar have next?

In the introduction document provided by Polestar to investors, there is a key data point: by 2025, Polestar will achieve an annual sales volume of 290,000 vehicles. This key performance indicator is ten times higher than the estimated sales volume for 2021.

Friends who often watch “Supercharging Station” content must know that Polestar already has two products on the market: Polestar 1 and Polestar 2. As the first generation totem of the brand, Polestar 1 will complete its mission this year. Therefore, it cannot be expected that Polestar 2 will achieve the overall sales record of 290,000 vehicles by itself.

Polestar’s plan is to release a key new vehicle every year from 2022 to 2024.

In 2022, Polestar 3 will arrive as scheduled. This will be a large luxury SUV built on the SPA2 platform. Polestar clearly indicated in the document that the price and level of this car will correspond to Porsche’s Cayenne.

In 2023, the Polestar 4, which is considered to be the SUV version of the Polestar 2 in size, will begin mass production. However, the platform has been transferred from the former CMA platform to the more advanced PMA platform. From the silhouette given in the document, the side profile of this car can be described as having the same ingenious design as the Model Y. Its hypothetical enemy will be Porsche’s Macan. Interestingly, 2023 is also the year that the electric version of the Macan is released.

In 2024, Polestar 5 will become the final battle of this campaign. The highly acclaimed Polestar Precept will be transformed into a mass-produced four-door luxury sports GT, indicating the direction of Polestar’s future design and performance. The imaginary enemy of this car is Porsche Panamera.

These three cars will obviously have impressive electrification performance. In the simple performance guidelines provided by the official, the design endurance index of the three models exceeds 600 km.

Polestar’s figures show that 77% of sales by 2025 will be completed by these three new cars.

Why are these three cars selling well?

This is indeed a concern for Chinese consumers. Although Polestar has been winning consecutive victories in the main battlefield — the European market, its sales in the Chinese region still need new highlights to stimulate.

First of all, the elements that have already been crystallized into the Polestar brand DNA in recent years will continue to be retained and strengthened. In my opinion, there are at least three tags that I must mention when talking about Polestar, which are sports, design, and sustainability. We have analyzed this part in various articles before, so we will not elaborate on it anymore. Of course, I believe that some intrinsic qualities that set Polestar apart from its competitors, such as extremely high manufacturing quality and consistent safety standards, are also part of this category, even if they are not mentioned repeatedly.

Secondly, it is the rapid growth of the market segment in which Polestar’s products are located.

After all 5 Polestar models are launched, the matrix composed of 4 models for sale can already cover 80% of the segmented market in the automobile industry.

In terms of specific models, Polestar stated that the C/D-level luxury electric vehicle market where the Polestar 2 is located will have a compound annual growth rate of 29%. The critical values for annual compound growth rates for E-level luxury electric SUV where Polestar 3 is located, D-level luxury electric SUV where Polestar 4 is located, and Coupe luxury electric GT where Polestar 5 is located are sequentially 28%, 46%, and 31%.Meanwhile, Polestar believes that it has already taken the lead in the rapidly growing segment of electric vehicles. As can be seen from the production plans for Polestar 3, 4, and 5, these models will have a global supply chain and production capacity, which will help Polestar enter key markets as soon as possible. Polestar states that the compound annual growth rates for the electric vehicle markets in the Americas, EMEA (Middle East and Africa, Europe), and China are 14%, 33%, and 39%, respectively.

Under the dual elements, Polestar estimates that the compound annual growth rate for the global premium/luxury electric vehicle market will reach 29% by 2025, and from now until 2025, the compound annual growth rate of Polestar’s own sales will reach 78%.

Once again, it’s about technological leadership.

While Chinese consumers are still amazed by the stunning electric motor power of the Model S Plaid, Polestar has announced that it is developing a higher power electric motor in their presentation materials.

Currently, the peak power of the Porsche Taycan rear electric motor is 300 kW, and the peak power of the Plaid is 375 kW. Polestar’s in-development P10 motor will reach 450 kW, and coupled with a dual-motor system, it can provide a more compact and flexible power layout, and the maximum power output can be as high as 650 kW.

Polestar will also develop an 800 V battery system and maintain a product layout that coexists with 800V/400V. The 103 kWh battery pack will have higher efficiency, capable of charging to 80% in 20 minutes.

As for the previously worried about intelligent driving system, Polestar has also made it clear that, in addition to being the first brand to deliver an OTA Pilot system in Europe, Polestar 3 will also use the most advanced Nvidia AD chip + Luminar LiDAR hardware combination and have corresponding assisted driving capabilities.# Where is the competitive advantage of Lynk & Co?

If Lynk & Co’s current success relies on its proficiency in traditional vehicles, it’s clear that the company will make a full-scale attack in the electric and intelligent field in the future.

The position of Lynk & Co in the Geely-Volvo Ecological System

This listing not only dispels the uncertainty about Lynk & Co’s independence in the industry but also provides a clear understanding of the company’s position in the entire Geely-Volvo Ecological System.

In the prospectus, Lynk & Co also released a fantastic chart, which, to put it in my words, is called: How Lynk & Co reaches the pinnacle.

From the chart, although there are many companies focusing on electric vehicles presently, Lynk & Co positions itself and Tesla as the only two globally pure electric vehicle brands with complete electrification as its product mission.

If “complete electrification” is the exclusive benefit for new brands, “globally pure” has become controversial.

For example, companies like NIO and Xpeng listed in Lynk & Co’s figure have begun delivering vehicles overseas recently, and it may happen that Silicon Valley’s hottest “startups” like Lucid will suddenly come to China to try their luck and replicate Musk’s success with a Chinese company.

But indeed, Lynk & Co has taken the lead in overall layout and pace, and the overall image of Lynk & Co’s brand, including the management team, may be more friendly and familiar to American investors.

Moreover, the dual support of Geely and Volvo is also of vital importance to Lynk & Co’s stable development. In addition to the two groups’ technical platform sharing, Lynk & Co will also receive substantial cash support directly from this listing.

Lynk & Co’s dual attributes are also reflected in the company’s belief that it is both a traditional OEM with a solid foundation and an innovative start-up. This understanding and insight between “traditional car companies” and “new forces” will contribute to the better development of the Lynk & Co brand.

If you carefully read the investor introduction section, you will notice that Polestar is striving to make investors aware that it is a more “value-for-money” company. Polestar is a light-asset company, for example, the heavy investment part such as factories belongs to Volvo or Geely, while Polestar will invest more resources in management and operation to ensure that more capabilities are exerted in key areas such as product research and development and sales network expansion.

Just as I was writing this article, I suddenly discovered that my old friend, Mr. Thomas, the CEO of Polestar, had accepted an interview with the German old media “Auto-Sport”, in which he rarely explicitly stated that the Polestar brand will focus on developing high-end electric sports products and will be positioned to compete with the Porsche brand.

Positioning high, products high, sales high.

Hopefully, Polestar can shine brightly.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.