Why this billionaire investor is all in one electric vehicle maker

For the pioneer of investment Alec Gor̬s Рwhich has made a name for itself in recent years through very successful PSPC transactions with Hostess and Lamp Рcutting a big check to help attract the public to electric vehicle maker Polestar makes perfect sense.

He just checks all the boxes, says Gores.

“We literally see so many offers. The first thing is that we are looking at things quickly. Then we have a lot of conversations about the things we find. The art is to start with a great company with the potential to be the leader in the space. Then you go to the leadership team, and then you go to the product, a great product and revenue, projections that all of those things have to meet. Most importantly, we need to be aligned with the leadership team. In this case, Thomas [Ingenlath, Polestar CEO] and their team is amazing. The relationship with Volvo is also helpful here, ”Gores explained on Yahoo Finance Live, referring to his selection process to enter into a SPAC deal with Polestar.

Swedish electric car maker Polestar (an offshoot of Volvo) announced this week that it will go public by merging with a SPAC created by Gores and investment bank Guggenheim. Gores Guggenheim’s merger with SPAC gives Polestar an enterprise value of $ 20 billion. It includes $ 800 million in cash from Gores Guggenheim that will go to Polestar to increase production of its current model line and develop more offerings.

Polestar plans to reach breakeven by 2023, according to its investor presentation. The company plans to reach $ 17.8 billion in sales by the end of 2025, generating $ 1.6 billion in operating profits.

“It’s a company that delivers – we actually deliver cars. We had 29,000 deliveries this year. I think this proven track record has led Alec and his team to believe that we will meet our expectations,” Ingenlath told Yahoo Finance Live.

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Gores added: “We’re very excited about it. We believe in it. Thomas and the team will be one of the leaders in the space. We have a lot of belief in revenue. It’s a real car, not a concept.”

Brian Sozzi is an editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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