Why Gores Guggenheim Stalled Out With a 13% Drop in December

The electric-vehicle (EV) market got overheated in 2021, but it cooled considerably as the year wore on, which explains why Gores Guggenheim (NASDAQ: GGPI), a special-purpose acquisition company (SPAC) expected to merge with Swedish EV maker Polestar Automotive in the first half of this year, saw its stock fall 13.1% in December, according to data from S&P Global Market Intelligence. While the proposed $20 billion reverse merger between Polestar and Gores Guggenheim should be an enticing driver for investors, the EV maker is caught up in the automotive industry's chip shortage problem, and Polestar CEO Thomas Ingenlath is expecting the supply chain issues to drag out well into the year. While the chip shortage affects all car manufacturers, from rival EV companies such as Tesla (NASDAQ: TSLA) to old-line car makers such as Ford (NYSE: F), Polestar has been counting on its new Polestar 2 vehicle to put it on the map with car buyers, because it will be a relatively affordable vehicle at $45,900.