Polestar SPAC Presentation Deck

The risks presented below are some of the general risks related to the Company, GGI and the combined company following the consummation of the proposed Business Combination (the "Post-Combination Company"). The list below is not exhaustive and is qualified in its entirety by disclosures contained in future regulatory filings by the Company or GGI. These risks speak only as of the date hereof and neither the Company nor GGI make any commitment to update such disclosure. The risks highlighted in future regulatory filings may differ significantly from and will be more extensive than those presented below. Risks Related to the Company's Business and Industry The Company's operations rely heavily on a variety of agreements with its strategic partners Volvo Cars and Geely, and the Company may come to rely on other original equipment manufacturers, vendors and technology providers. The inability of the Company to maintain agreements or partnerships with its existing strategic partners or to enter into new agreements or partnerships could have a material adverse effect on the Company's ability to operate as a standalone business, produce vehicles and reach its development and production targets. The Company's ability to produce vehicles and its future growth depend upon its ability to maintain relationships with its existing suppliers and strategic partners, and source new suppliers for its critical components, and to complete building out its supply chain, while effectively managing the risks due to such relationships. The Company is dependent on its strategic partners and suppliers, some of which are single-source suppliers, and the inability of these strategic partners and suppliers to deliver necessary components of the Company's products on schedule and at prices, quality levels and volumes acceptable to the Company, or the Company's inability to efficiently manage these components, could have a material adverse effect on the Company's results of operations and financial condition. The Company may not be able to accurately estimate the supply and demand for its vehicles, which could result in inefficiencies in its business, hinder its ability to generate revenue and create delays in the productions of its vehicles. If the Company fails to accurately predict its manufacturing requirements, the Company incurs the risk of having to pay for production capacities that it reserved but will not be able to use or that the Company will not be able to secure sufficient additional production capacities at reasonable costs in case product demand exceeds expectations. . The Company may be unable to grow its global product sales, delivery capabilities and its servicing and vehicle charging networks, or the Company may be unable to accurately project and effectively manage its growth. If the Company is unable to expand its charging network and servicing capabilities, customer's perception of the Company could be negatively affected, which could materially and adversely affect the Company's business, financial condition, results of operations and prospects. The Company relies on its partnerships with vehicle charging networks to provide charging solutions for its vehicles. The Company relies on its strategic partners for servicing its vehicles and their integrated software. If the Company or its strategic partners are unable to adequately address the service requirements of its customers, the Company's business, prospects, financial condition and results of operations may be materially and adversely affected. The Company has experienced and may in the future experience significant delays in the design, development, manufacture, launch and financing of its vehicles, which could harm its business and prospects. The success and growth of the Company's business depends upon its ability to continuously and rapidly innovate, develop and market new products and there are significant risks related to future market adoption of the Company's products. The Company's limited operating history makes evaluating its business and future prospects difficult and may increase the risk of your investment. If the Company's vehicles fail to perform as expected, its ability to develop, market and sell or lease s products could be harmed. The Company has incurred net losses each year since its inception and expects to incur increasing expenses and substantial losses for the foreseeable future. Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion cells or semiconductors, could harm the Company's business. The Company will need to maintain and significantly grow its access to battery cells, including through the development and manufacture of its own cells, and control its related costs. The Company must develop complex software and technology systems, including in coordination with its strategic partners, vendors and suppliers, in order to produce its electric vehicles, and there can be no assurance such systems will be successfully developed. The Company's vehicle production relies heavily on complex machinery for its operations and the production in the manufacturing plants for its vehicles involves a significant degree of risk and uncertainty in terms of operational performance and costs. The Company relies on its partners to manufacture vehicles and the Company's partners have limited experience in producing electric vehicles. Further, the Company relies on sufficient production capacity being available and/or allocated to it by its partners in order to manufacture its vehicles. Delays in the timing of expected business milestones and commercial launches, including the Company's ability to mass produce its electric vehicles and/or complete and/or expand its manufacturing capabilities, could materially and adversely affect the Company's business, financial condition, results of operations and prospects. The Company faces risks associated with international operations, including tariffs and unfavorable regulatory, political, tax and labor conditions, which could materially and adversely affect its business, financial condition, results of operations and prospects. Currently, the Company relies heavily on manufacturing facilities based in China and part of its growth strategy will depend on growing its business in China, which subjects the Company to economic and operational risks specific to China. If the Company updates or discontinues the use of its manufacturing equipment more quickly than expected, it may have to shorten the useful lives of any equipment to be retired as a result of any such update, and the resulting acceleration in the Company's depreciation could negatively affect its financial results. The Company's operating and financial results forecasts and projections rely in large part upon assumptions and analyses developed by it. If the assumptions or analyses that the Company made in connection with its projections Appendix Selected Risk Factors and forecasts prove to be incorrect, the Company's actual results of operations may be materially different from its forecasted results. The Company depends on revenue generated from a limited number of models and expects this to continue in the foreseeable future. . . The Company's distribution model is different from the currently predominant distribution model for automakers, and its long-term viability is unproven. The Company will not have a third-party retail product distribution network in all of the countries in which it operates. The Company may face regulatory challenges to or limitations on its ability to sell vehicles directly. Insufficient reserves to cover future warranty or part replacement needs or other vehicle repair requirements, including any potential software upgrades, could materially adversely affect the Company's business, prospects, financial condition and results of operations. The Company is subject to risks associated with advanced driver assistance system technology. The Company is also working on adding autonomous driving technology to its vehicles and expects to be subject to the risks associated with this technology. The Company cannot guarantee that its vehicles will achieve its targeted assisted or autonomous driving functionality within its projected timeframe, or ever. The Company may be unable to offer attractive leasing and financing options for its current vehicle models and future vehicles, which would adversely affect consumer demand for its vehicles. The Company's vehicles will make use of lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame. ● The Company's business and prospects depend significantly on the Polestar brand. If the Company is unable to maintain and enhance its brand and capture additional market share or if the Company's reputation and business is harmed, it could have a material adverse impact on the Company's business, financial condition, results of operations and prospects. The automotive industry has significant barriers to entry that the Company must overcome in order to manufacture and sell electric vehicles at scale. ● The Company operates in an intensely competitive market, which is generally cyclical and volatile. Should the Company not be able to compete effectively against its competitors then it is likely to lose market share which could have a material adverse effect on the business, financial condition, results of operations and prospects of the Company. Risks Related to Cybersecurity and Data Privacy If vehicle owners customize Polestar vehicles or change the charging infrastructure with aftermarket products, the vehicle may not operate properly, which may create negative publicity and could harm the Company's business. Any unauthorized control or manipulation of the Company's products' systems could result in loss of confidence in the Company and its products. Data privacy concerns are generally increasing, which could result in new legislation, negative public perception and/or user behaviour that negatively affect the Company's business and product development plans. The Company is subject to evolving laws, regulations, standards, policies, and contractual obligations related to data privacy, security and consumer protection, and any actual or perceived failure to comply with such obligations could harm the Company's reputation and brand, subject the Company to significant fines and liability, or otherwise adversely affect its business. The Company's ability to generate meaningful product revenue will depend on consumer adoption of electric vehicles. However the market for electric vehicles is still evolving and changes in governmental programs incentivizing consumers to purchase electric vehicles, fluctuations in energy prices, the sustainability of electric vehicles and other regulatory changes might negatively impact adoption of electric vehicles by consumers. If the pace and depth of electric vehicle adoption develops more slowly than the Company expects, its revenue may decline or fail to grow, and the Company may be materially adversely affected. The global COVID-19 outbreak and the global response has affected and could continue affect the Company's business and operations. The Company's facilities or operations could be and have been adversely affected by events outside of its control, such as natural disasters, wars, health epidemics or pandemics, or security incidents. Risks Related to the Company's Employees and Human Resources ● The Company's ability to effectively manage its growth relies on the performance of highly skilled personnel, including the senior management team and other key employees, and the Company's ability to recruit and retain key employees. The loss of key personnel or an inability to attract, retain and motivate qualified personnel may impair the Company's ability to expand its business. The Company is dependent on the continuing services of Thomas Ingenlath, its Chief Executive Officer. Risks Related to Litigation and Regulation The Company is subject to evolving laws and regulations that could impose substantial costs, legal prohibitions or unfavorable changes upon its operations or products, and any failure to comply with these laws and regulations, including as they evolve, could result in litigation and substantially harm its business and results of operations. The Company may choose to or be compelled to undertake product recalls or take other actions, which could result in litigation and adversely affect its business, prospects, results of operations, reputation and financial condition. The Company may face regulatory limitations on its ability to sell vehicles directly, which could materially and adversely affect its ability to sell its vehicles. Risks Related to Intellectual Property The Company may fail to adequately obtain, maintain, enforce and protect its intellectual property and licensing rights, and may not be able to prevent third parties from unauthorized use of its intellectual property and proprietary technology. If the Company is unsuccessful in any of the foregoing, its competitive position could be harmed and it could be required to incur significant expenses to enforce its rights. Risks Related to Financing and Strategy Transactions ● The Company will require additional capital to support business growth, and this capital might not be available on 51 commercially reasonable terms, or at all. The Company's financial results may vary significantly from period to period due to fluctuations in its operating costs, product demand and other factors. Risks Related to Tax Unanticipated tax laws or any changes in tax rates or in the application of existing tax laws to the Company or the Company's customers may adversely impact its profitability and business. ● Risk Related to GGI and the Business Combination Gores Guggenheim Sponsor LLC (the "Sponsor") and certain GGI stockholders affiliated with the Sponsor have agreed to vote in favor of the Business Combination, regardless of how GGI's stockholders vote. The Sponsor, certain members of the GGI Board and GGI officers have interests in the Business Combination that are different from or are in addition to other stockholders in recommending approving the Business Combination and the other matters that will be described in a proxy statement/prospectus that will be filed in connection with the Business Combination. Such conflicts of interests include that the Sponsor and GGI's officers and directors will lose their entire investment in GGI if the Business Combination is not completed. Because the Post-Combination Company will become a publicly listed company by virtue of a merger as opposed to an underwritten initial public offering (which uses the services of one or more underwriters), less due diligence on the Post-Combination Company may have been conducted as compared to an underwritten initial public offering. GGI' stockholders will experience dilution as a consequence of the issuance of Post-Combination Company securities as consideration in the Business Combination and may experience dilution from several additional sources in connection with and after the Business Combination, including any future issuances or resales of the Post-Combination Company securities. Having a minority share position may reduce the influence that GGI' stockholders have on the management of the Post-Closing Company. The ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of key personnel, including the Company's key personnel whom GGI expects to stay with the Post- Combination Company. The loss of key personnel could negatively impact the operations and profitability of the Post-Combination Company and its financial condition could suffer as a result. Past performance by The Gores Group, including its management team, may not be indicative of future performance of an investment in GGI or the Post-Combination Company. GGI and the Company expect to incur significant transaction costs in connection with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by GGI if the Business Combination is not completed. GGI has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that GGI will be unable to continue as a going concern if GGI does not consummate an initial business combination by March 25, 2023. Unless GGI's amends the its certificate of incorporation and amends certain other agreements into which it has entered to extend the life of GGI, if GGI is unable to effect an initial business combination by March 25, 2023, it will be forced to liquidate and the GGI's warrants will expire worthless. If third parties bring claims against GGI, the proceeds held in the trust account could be reduced and the per-share redemption amount received by GGI's stockholders may be less than $10.00 per share. The Company's operating and financial results forecasts, which were presented to the GGI Board, may not prove accurate. During the interim period, GGI is prohibited from entering into certain transactions that might otherwise be beneficial to it or its respective stockholders. Risks Related to the Post-Combination Company Following the Business Combination If the Business Combination's benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of the Post-Combination Company's securities may decline. The Post-Combination Company's management team will have limited experience managing a public company. The requirements of being a public company may strain the Post-Combination Company's resources and distract its management, which con." which could make it difficult to manage its business, particularly after the Company is no longer an "emerging growth company." The Post-Combination Company will be a foreign private issuer within the meaning of the rules under the Exchange Act, and as such it will be exempt from certain provisions applicable to United States domestic public companies. As the Post-Combination Company will be a "foreign private issuer" and intends to follow certain home country corporate governance practices and will be a "controlled company" within the meaning of the NASDAQ listing standards and intends to rely on, exemptions from certain corporate governance requirements. As a result, its shareholders may not have the same protections afforded to shareholders of companies that are subject to all to s may not NASDAQ corporate governance requirements. NASDAQ once require The Post-Combination Company may lose its foreign private issuer status in the future, which could result in significant additional costs and e s and expenses. oprite company the Comm As a private company, the Company has not been required to document and test its internal controls over financial amant boon. reporting nor has management been required to certify the effectiveness of its internal controls and its auditors have not been required to opine on the effectiveness of its internal control over financial reporting. As such, it is likely that the Company may identify material weaknesses in its internal control over financial reporting which could lead to errors in the Post-Combination Company's financial reporting, which could adversely affect the Post- Combination Company's business and the market price of the Post-Combination Company's securities.