WILL SPIN-OFFS BE SLOWED BY STOCK MARKET SLUMP?

The incredible stock market valuations of the past two years for EV start-ups, some with zero revenue, have sunk dramatically downwards.

In November last year, Rivian was the world’s fifthmost-valuable car company, above Daimler, while Lucid was seventh, above General Motors. The value of Tesla was more than a trillion dollars – four times that of Toyota, the world’s leading car company by revenue, in second place.

Now Rivian has sunk to 11th, Lucid is 14th and Tesla’s share price is down more than $300 billion.

Volvo, meanwhile, was valued at a conservative $18bn (£13bn) when it listed in October and is now ranked 23rd among global car companies on valuations, behind Tata.

However, that hasn’t stopped it from going ahead with the listing of its Polestar division via a Spac (special acquisition company) that, when it completes, could have it valued at $20bn (£15bn).

Volvo parent firm Geely wants to also list the Chinese ‘lifestyle’ EV division of Lotus, Lotus Technology, and is busy tempting potential investors with behind-the-curtains peeks at its £100k debut SUV.

The attraction of the stock market to raise money for car makers hasn’t dimmed quite yet – at least not for those that believe they can demonstrate a solid foundation for future growth.