Polestar 2 a global bargain in Australia

WHEN Polestar’s Australian office announced pricing for its just-launched Polestar 2 electric sedan, the reaction from many observers was that of surprise.

Many expected a similar premium pricing strategy to Volvo – given the close corporate links between the two companies – but the incoming Polestar 2 range is instead aligned with the Tesla Model 3, Australia’s best-selling pure electric vehicle (EV) and one that verges on mainstream pricing.

Before any subsidies or incentives are applied, the entire Australian Polestar 2 range undercuts one other recently arrived EV, the Hyundai Ioniq 5, the Polestar 2 opening at $59,990 before on-road cists for the standard range single motor and topping out at $69,900 for the long-range dual motor. The Ioniq 5, meanwhile, starts at $71,900.

Value indeed for Polestar 2 customers, but one detail that was lost in the noise of the model’s launch was the fact that, globally speaking, Australians are getting a hell of a deal on the Polestar 2.

In the USA, the Polestar 2 range kicks off around the equivalent of $A62,800 before federal tax credits and incentives for the Long Range Single Motor variant, which is the mid-spec model in Australia (the US does not receive the smaller 67kWh battery).

However, the Australian equivalent costs just $2100 more. Considering the affordability of premium vehicles in the USA relative to Australia, the Polestar 2 comes astonishingly close to price parity in comparison with the US.

In the UK – a more significant right-hand drive market than Australia – roughly $A73,000 is required to secure a base Polestar 2 Standard Range Single Motor with no options. Even in Polestar’s home market of Sweden, the 2 commands a starting price equivalent to $A75,500. 

“One of the factors that makes it difficult to do a direct price comparison is that we’ve got quite a heavy tariff situation between a Chinese-produced product into the US, and so that’s a little bit of a skewing factor if you do a direct conversion,” Polestar global PR manager Brent Ellis told GoAuto when asked about Australia’s apparent price advantage.

Polestar’s planned US factory, to be sited in South Carolina, will allow the brand to sidestep the current 27 per cent import tariff on Chinese goods although it is only earmarked to build the larger Polestar 3 and the 2 will continue to come from Polestar’s Chinese factory in Chengdu.

As for the United Kingdom, the base Standard range Single motor variant is specified virtually identically to Australian models – apart from a slightly smaller battery and reduced range – yet costs British customers $A15,000 more than the Australian equivalent.

For Aussie motorists constantly miffed at comparatively lower retail prices for cars in overseas markets, the Polestar 2’s pricing is a rare win.

“Brexit didn’t help things for the UK’s import situation either, so there are some external factors over there as well,” explained Mr Ellis.

For Australia, the Polestar 2’s sharp price tag was deliberately whittled down to win over customers, with the company acknowledging that EV price premiums remain a barrier to mainstream adoption.

“The two biggest concerns for consumers coming over to EVs are range and pricing; what we want to do is make the entry level for Polestar 2 accessible, and if people are able to afford to move over at that level then that means they’re coming over into an EV – which is what we want,” said Polestar Australia managing director Samantha Johnson.

“They then have the choice if they want to put the Pilot Pack or the Plus Pack or anything else on top then they can do that, but this is about giving consumers choice as to what they want rather than putting it all in there and saying ‘guess what, you’ve got to pay (a higher price)’.”

Polestar has copped flak for leaving higher-tech safety features on the options list for the Australian market, though the company’s rebuttal is that those features are driver-assist technologies – not equipment critical to the vehicle’s crashworthiness and occupant survivability. 

However, some argue that this equipment – such as blind-spot monitoring with steering support, cross-traffic alert, rear collision warning, adaptive cruise control, a 360-degree parking camera and adaptive LED high-beam – significantly mitigate the risk of an accident occurring in the first place. 

Polestar has pledged to monitor customer demands regarding safety, but for now these features remain clustered on the Pilot Pack, a $5000 option.

This structure mimics what Polestar is doing in other markets, including the USA and UK.

Local Polestar 2 uptake is expected to be strongest on the single-motor models, both standard range and long range, which respectively retail at $59,900 and $64,900 before on-road costs. The $69,900 + ORC Long Range Dual Motor is expected to be a niche performer. 

“We’re bringing in a good mix of long-range single-motor and standard-range single-motor, we’re bringing in a good balance of those,” Ms Johnson continued. 

“It’ll take us a little while to understand where the consumers’ interest is. As we get more test drive interest and we understand more where consumers are moving towards, we’ll adapt through the year as to what consumers want.”