Polestar ‘golden vehicle’ set for debut

The new Polestar 4 will roll off production lines next week

Polestar ‘golden vehicle’ set for debut
Polestar execs are expecting strong demand in China and worldwide

Customer deliveries of the Polestar 4 in China will start before the end of the year as the first cars are set to emerge from the Chengdu plant in the next few days, according to Thomas Ingenlath, CEO of the Sino-Swedish EV pure play. Deliveries to the rest of the world are planned from mid-2024.

And the firm’s leadership team is feeling bullish on the Polestar 4’s prospects. “We are starting the deliveries in China so, of course, that will serve as a good proxy of its success," says Polestar CFO Johan Malmqvist.

“It is one of those products that we expect the higher volumes to come from, and I think it is very well positioned to do so,” he continues. “We see the Polestar 4 becoming more of a golden product. It caters well for both the Asian and the US market, and Europe for that matter.”

“Obviously we are very optimistic about that we will be successful… and attract many more customers,” adds Ingenlath. And he reports “very strong interest in exploring this car and upgrading to it” from its existing Polestar 2 customer base.

“That is why we always say we are not brand starting from scratch,” Ingenlath continues. As well as conquest customers, he sees see significant “potential of people upgrading and going from a Polestar 2 to Polestar 4, spending that much more money on that next level of exclusive SUV”.

Software learnings

One factor in the executives’ optimism is that the Polestar 4 represents, in Ingenlath’s words, the “first execution” of the joint venture (JV) his firm announced in June with Chinese technology company Xingji Meizu, a subsidiary of major Polestar shareholder Geely. The JV is aimed at developing a seamless operating system for Polestar cars sold in China, including in-car apps, streaming services, and intelligent vehicle software.

And it is not just in China that Polestar expects to see a benefit from the improved in-car experience. “In China, recognising the competitive landscape, we have taken a different approach and formed an innovative joint venture,” says Malmqvist.

“We are very excited about the prospects — firstly, in selling more cars. And, secondly, through the technology that our partner will bring to our cars, which could be deployed internationally in addition to China.”

Ingenlath agrees. “A lot of what I see happening there for the customer in terms of in-car software, I absolutely expect for us as well learnings for the rest of the world,” he says.

But he is cautious that what works in China may not translate completely to the rest of the world.

“Of course, this will not be a direct translation,” he cautions. “We have a very strict border between what is the cloud and the customer electronics in China versus the Western world. Having said that, certain behaviours, what we see as entertaining features, I definitely see benefits from us learning there.”

Expanded line-up

More generally, the addition of both Polestar 4 and, in 2024, 3 is, in Ingenlath’s view “a game changer”, compared to having “built our brand, commercial operations and supply chains” on solely the Polestar 2. “You can see the significant opportunity that we now have with two new luxury performance SUV models coming to the market,” says the Polestar chief.

Preparations are “progressing well” for the start of Polestar 3 production, first in China early next year, and then in the US next summer. The new model successfully completed hot weather testing in the UAE in September. The last phase of testing will be completed by the end of this year, according to Ingenlath.

And he reports that “the new electric performance SUV created a buzz when it arrived in our Polestar Spaces over the summer”.

Wider appeal

Addressable market is a particular driver for Polestar optimism. “I would call Polestar 3 and 4 much more worldwide-catering cars,” says Ingenlath.

“Size-wise, they are addressing a need in the US and in China, much more than the Polestar 2 can do as a fairly compact European-sized car. We all know that the SUV segment has a much larger target group. The addressable market, almost across the world, for SUVs is the biggest, and better cost as well.”

The start of Polestar 4 production in the firm’s South Carolina plant in mid-2024 is another important milestone. Having a car produced in the US for the US “is a big enabler for us in our profitability journey”, Ingenlath notes, but it “is as well a big emotional thing”.

The more premium models also promise to allow Polestar to introduce more flexible options packages, boosting profitability on cars it thinks should be capable of selling at 20pc+ margins. “As our model line-up grows into more luxurious segments, we also need to offer customers the ability for greater customisation, generating more revenue across our car line-up,” Ingenlath says.

And the two new launches are central to Polestar’s ambitions to grow sales from a forecast 60,000 in 2023 to 155,000-165,000 in 2025. But that growth should not necessarily be expected to be linear, i.e. c.110,000 sales in 2024.

Additional Polestar 4 and 3 sales “will occur in a more meaningful way really starting from Q2”, Ingenlath cautions. “You have the second half of the year with the three-car lineup, so there is definitely going to be a certain phasing next year that reflects the start of production and deliveries.”

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