SUVs to help stabilise Polestar’s future
BY MATT BROGAN | 23rd Sep 2024
POLESTAR has been struggling to meet key model launch targets and is reportedly some €3.2 billion ($A5.3b) in debt but as stronger-selling models finally enter the line-up – and with shareholders including Geely providing operational and financial support – Polestar looks set to shine brighter in 2025-26.
Speaking with GoAuto at the launch of the Polestar 3 in Tasmania, Polestar Australia managing director Scott Maynard said the brand is poised to make an important turnaround in the next 12 to 18 months as new models attract a more diverse buyer set to dealerships across the globe.
“The new product will open the door to that (higher sales volumes). The Polestar 4 in particular is expected to be a bit of a winner in terms of volume, and likely to catapult to the top of the pops in terms of our highest selling vehicle,” he predicted.
“And with the improvement in production and the diversity of production plants across the world – and the opening up of new markets – the portfolio that we have got now will absolutely get us back to black, which has been so hard to do with just one car.”
Earlier this year, the Sino-Swedish electric vehicle maker borrowed an additional €850 million ($A1.4b) amount from a syndicate of 12 international banks that helped it to push forward when Volvo Cars decided to discontinue its financial support.
However, in markets such as Australia and the United States where SUV models are more popular than passenger sedans, it is expected that Polestar 3 and 4 models will come into their own, bringing with them the sales volume required to return the OEM to profit.
“A huge investment has been made in setting up the brand in exactly the right way. Establishing the kind of sustainability credentials that the brand now has – and that doesn’t come cheaply – it is a more expensive way of doing things,” said Mr Maynard.
“But now that is established, and the protocols are set, the economies of scale will come into play as the brand continues on that track and the addition of volume through models that sit in more popular market segments – like the medium and large SUV – will then be the kicker.”
Mr Maynard said early indicators show the Polestar 3 is likely to become a favourite among Australian buyers with strong pre-orders entering the network.
The model will be offered this month from $118,420 plus on-road costs, taking the fight to rivals including the Audi Q8 E-Tron, BMW iX, Jaguar I-Pace, Mercedes-Benz EQE, Porsche’s new electric Macan, and Tesla Model Y Performance.
“We are very happy with the pre-orders that we have taken on the 3. Australia performs well, in fact it probably punches above its weight in sitting within the global top 10 markets for Polestar – and our pre-orders are in that same bracket,” enthused Mr Maynard.
“And I think it will do even better once people get to drive it … there has been a lot of interest in the Performance package with Australian buyers gravitating toward our higher specification model. I think once you cross some of those critical price barriers, they just keep going,” he said in reference to the flagship variant’s $141,900 list price (excluding on-road costs and options).
Polestar said previously it would need €1.2 billion ($A1.9b) in external funding to break even in 2025.
Geely chief executive officer and Polestar board member Daniel Li told Reuters the Chinese manufacturer would continue backing the brand.
“Geely will continue to provide full operational and financial support to the iconic performance car brand going forward,” he stated.
“We will retain our shares in Polestar and intend to participate in future financing activities when required.
“Polestar will have full access to technologies and engineering expertise from Geely Holding to realise its global growth targets.”
Earlier this year, Polestar said it expected volume growth would support its target of 155,000 units in 2025.
“Volume and margin progression are expected to be weighted towards the second half of 2024, as the two SUVs reach full production and global distribution,” the company said in a statement referencing the Polestar 3 and 4.
The Polestar 3 goes on sale locally from this month (September) with the Polestar 4 arriving in November.
Pricing and detailed specification of the Polestar 3 will be revealed on GoAuto from Wednesday, alongside our local launch review.
