Electric car maker Polestar, controlled by Sweden's Volvo Cars and its Chinese owner Geely, said Monday it plans to list on the Nasdaq stock exchange in New York, with an expected valuation of $20 billion (17 billion euros).

Polestar, a European competitor to Tesla, said in a statement that the funds from the initial public offering (IPO) would be used to "help fund significant investment in the expansion of its products, operations and markets to create a leading company in the rapidly growing global premium electric vehicle market."

While Polestar has only produced two models since being set up in 2017, the valuation would place the Swedish brand just behind giant Nissan, and ahead of carmakers Renault and Subaru.

Tesla, in turn, is the highest-valued carmaker in the world, with a market capitalisation of over $750 billion.

The listing will be carried out by combining Polestar with a special purpose acquisition company (SPAC), Gores Guggenheim, set up by US investment firms The Gores Group and Guggenheim Capital.

The deal is expected to close in the first half of 2022.

The newly formed company would be named Polestar Automotive Holding UK Limited.

Founded by Volvo and Geely four years ago, Polestar sold only 10,000 vehicles in 2020, but is aiming to expand rapidly and is targeting annual unit sales of around 290,000 by 2025.

Currently, the carmaker sells the Polestar 2 model and plans to launch the Polestar 3 next year and expects to be present in 30 countries by 2023.

The $20-billion valuation is equivalent to three times the targeted revenue in 2023 and 1.5 times the expected sales in 2024, the company said.

Together with battery maker Northvolt, the company is the Swedish flagship in the electric car sector.

In addition to Volvo and Geely, the company's shareholders include US film star Leonardo DiCaprio.

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