Thursday, April 25, 2024
NewsPolestar Doesn’t Want to Engage in Price Wars

Polestar Doesn’t Want to Engage in Price Wars

Polestar says it won't lower its prices to compete with Tesla.

  • The company wants to be a premium brand while Tesla aims to sell to as many buyers as possible.

  • Polestar’s operating loss is still significant, but the situation is better than last year.

  • The brand has three new models coming in the next two years.

Polestar’s CEO says his company will not engage in price wars to go after Tesla since the brand doesn’t see itself as a direct competitor.

With Tesla’s lead in the EV market, most newcomers try to emulate it and aim their strategy directly at the same buyers.

Instead of doing so, Polestar wants to be seen as a more upmarket and sportier alternative for drivers who want a premium experience and a more distinctive vehicle.

This is why the small automaker will not reduce the prices of its 2 liftback sedan and upcoming 3 SUV despite Tesla cutting close to $13,000 from the asking price of the Model Y earlier this year.

Currently, the Polestar 2 starts at $53,950 in Canada while the Tesla Model 3 starts at $54,990, and the upcoming Polestar 3 is set to start at $97,400 when it arrives later this year while the Tesla Model X starts at $135,990.

Despite Polestar saying it doesn’t want to compete directly with Tesla, its planned lineup is almost an exact copy of the Tesla range.

Indeed, the two other vehicles that have been announced, the Polestar 4 and the Polestar 5, will be similar in concept to the Tesla Model Y and Model S respectively.

Since current Polestar prices are fairly similar to Tesla prices, the difference in strategy comes into play in terms of volume. Indeed, Tesla wants to sell as many vehicles as possible, which is why it wants to make 1.8 million vehicles in 2023.

Of course, Polestar doesn’t have the resources to match this output, and that isn’t its goal anyway, with a planned production of 80,000 vehicles this year.

Speaking of resources, new car companies can take a few years to become profitable and Polestar isn’t an exception despite being backed by Geely and Volvo.

Things seem to be improving, however since Polestar posted a $204.7 million operating loss last quarter while the same period in 2021 saw a loss of $337.3 million.

Due to the continued popularity of SUVs and the increasing adoption of EVs, the arrival of the Polestar 3 and Polestar 4 in 2023 and 2024 should help the company improve its bottom line again in the coming years.

Source: Inside EVs


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