Polestar’s Lukewarm Debut Sends Troubling Signal for EV Makers

The lukewarm reception for Polestar Automotive Holding, the latest electric-vehicle company to go public in the US, is sending an ominous message to other startups: The purge isn’t over.

Yes, the auto industry is due for a transformation as oil prices soar and the need for cleaner transportation becomes increasingly apparent. But, runaway inflation and a looming economic downturn is making investors leery of speculative investments, which includes EV makers despite the allure of the coming revolution.

The Polestar 2 and Polestar 1 electric vehicles during the IAA Munich Motor Show in Munich, in 2021.

Photographer: Krisztian Bocsi/Bloomberg

Polestar’s tepid welcome -- the stock jumped 16% on its first day of trading Friday and then dropped 15% on Monday ...