Investors should consider buying Polestar Automotive as electric vehicle demand ramps up, according to Cantor Fitzgerald. Analyst Andres Sheppard initiated coverage of the Swedish EV maker with an overweight rating, as well as a 12-month price target of $7, saying the severe selloff in the stock is a long-term buying opportunity for investors. "We believe Polestar benefits from: the rapid industry demand for EVs, the support of Volvo (VOLV-B, NC) and Geely (Private), and a meaningful partnership with Hertz (HTZ, NC)," Sheppard said to clients in a Thursday note. With the stock down sharply this year, "we believe this can be a good entry point for investors with a long-term investment horizon," he said. PSNY 1D mountain Polestar Automotive shares 1-day Polestar is based in Sweden and started as a joint venture between the country's Volvo and China's Geely in 2017. It makes and sells passenger electric vehicles in more than 26 countries. The stock made its public debut on the Nasdaq last year , one of a number of EV firms that went public through a merger with a special purpose acquisition company, or SPAC. In its first day of trading, shares closed up 15.8% at $13. That's not where the stock is currently trading. Polestar shares dropped 54% in 2022, and are down about 35% this year. Investors be warned the stock currently trades under $5, which could mean extreme volatility at times. Still, the analyst's $7 price target suggests the EV stock could more than double from Wednesday's closing price. Polestar shares are up more than 2% during Thursday trading. The analyst thinks Polestar is well positioned to tap into the fast-rising demand for EVs given its scope and competitive pricing. Deliveries of the firm's Polestar 2, a compact car, and Polestar 3, an SUV, models are set to start in the fourth quarter of 2023, with average selling prices ranging from $40,000 to $100,000, according to the note. "The company reported annual revenue of ~$2.5B in 2022, after delivering 51,491 vehicles (above company guidance of 50,000)," Sheppard wrote. "Global sales are expected to increase to 13.2M in 2023 and to > 1.6M in the U.S. (according to BNEF), and we believe Polestar is well-positioned to benefit from this increasing demand." In addition, Polestar will continue to receive support manufacturing its vehicles from Volvo and Geely. The firm is now manufactures vehicles out of a China facility that is owned by Volvo, which the analyst says is an "important differentiator" for Polestar "since production has been an issue in the industry." "We believe PSNY will have the ability to leverage the manufacturing footprint of both Volvo Cars and Geely, which should provide the company with operating leverage and allow the business to scale-up production faster than competitors," the analyst wrote. —CNBC's Michael Bloom contributed to this report.