While it certainly isn’t the first electric vehicle special purpose acquisition company (SPAC), Gores Guggenheim (NASDAQ:GGPI) could prove to be highly profitable. GGPI stock just became available for public trading, and it has “story stock” written all over it.
That story is about the development of electric vehicle manufacturer Polestar. Sure, there are plenty of electric car makers out there, but Polestar is preparing to carve out its own niche.
At the same time, GGPI stock just can’t seem to break free of the $10 area. It’s frustrating, no doubt, for traders who had anticipated explosive price action from the outset.
Yet, like other story stocks, investors should be patient with this one. Polestar is still in the early innings – much like the vehicle electrification movement overall – and has plenty of room to grow.
A Closer Look at GGPI Stock
Just to recap, Gores Guggenheim went public with its initial public offering (IPO) in March.
The share price didn’t move too much until late September, when Gores Guggenheim announced its reverse merger with Polestar.
With that announcement, GGPI stock shot up from less than $10 to a high of $10.69. So, would this be the launch pad for higher price levels?
Not yet, apparently. That boost faded quickly, as the stock soon slid back to the $10 area.
Some traders might say that it’s a bad sign when a SPAC stock falls below its pre-merger-announcement price.
This could certainly happen with GGPI stock, but you can choose not to panic-sell your shares.
Indeed, you might even decide to add to your position if you believe in Polestar’s ambitious vision within the electric vehicle market.
Focusing On the Second Version
Like other electric vehicle start-ups, Polestar began on a small scale but intends to ramp up its production schedule.
Specifically, the company delivered around 10,000 vehicles last year, but expects to sell roughly 290,000 vehicles per year by 2025.
Polestar also plans to launch three new vehicle models by 2024. For now, though, the two well-publicized models are the Polestar 1 and the Polestar 2.
Suffice it to say that these are luxury vehicles with high price tags. For example, the Polestar 1 is available from a manufacturer’s suggested retail price (MSRP) of $155,000.
The Polestar 1 is in its final production run, so looking forward, we can safely conclude that the company’s focus will be the Polestar 2.
That vehicle features all-wheel drive and up to 2,000 pounds of towing capacity. Plus, the Polestar 2 can go from zero to 60 miles per hour (mph) in 4.5 seconds.
Ready to guess the MSRP? I probably tricked you into thinking that it will be super-expensive, but that’s actually not the case.
Surprisingly, the single-motor Polestar 2 MSRP starts at $38,400 (after tax credits), while the MSRP for the dual-motor Polestar 2 starts at $42,400 (again, after tax credits).
Welcome to the Big Apple
In a sign that Polestar is expanding its regional presence, the company just announced that it has opened a new retail location in New York City.
With the opening of Polestar Manhattan, the company’s nationwide network now includes 20 Polestar Spaces.
Current locations include Los Angeles, Boston, Dallas, Detroit, Minneapolis, Phoenix and Seattle.
Moreover, the U.S. Polestar retail network is expected to expand to total of 35 locations nationwide by the end of 2022.
But why New York City, and why now? Polestar CEO Thomas Ingenlath explains what’s so special about the Big Apple:
“New York City is an iconic city with deep roots in design, sustainability and engineering, and opening a Polestar Space in this location will allow us to showcase the superior driving experience and high-tech minimalism that defines and differentiates Polestar.”
Ingenlath added that Polestar Manhattan will serve as the brand’s retail home in New York City.
The Bottom Line
By establishing Polestar Manhattan, the company is effectively planting its flag in a city where there’s no shortage of drivers – and no shortage of interest in vehicle electrification.
And as the Polestar 2 becomes the company’s flagship vehicle, luxury will be more affordable than many automotive shoppers may have expected.
It’s all bullish for GGPI stock, which should break away from the $10 magnet price sooner or later.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.