“Consumer fear is slowing online mobility”

According to The Telegraph newspaper, Thomas Ingenlath, CEO of Polestar, explains that the low acceptance of electric cars among consumers is also due to the fact that many people are afraid of change. This is causing a delay in the spread of electric vehicles, according to the manager, who also warns that competitors who reduce their electric plans may fall into a “trap”. Manufacturers who delay their plans to roll out electric vehicles could put themselves at a disadvantage because of the difficulty of bringing new vehicles to market, he said.

He also talks to a British newspaper about the importance of embracing future innovations and believing in electric train technology, battery innovation and modern electronics and software. “If you’re not going with this and you think you can wait until the customers are ready, then that’s a wonderful trap”said Ingelath.

Companies such as Mercedes, Ford and Aston Martin have already said in the past that demand for electric models is falling short of expectations – reasons include high prices and poor charging infrastructure. It is said that many companies have lowered their expectations for the electric car. But Ingenlath and the electric brand Polestar are absolutely sure about the quality of electric drives. Ultimately it’s about “a more persuasive product” to provide, regardless of whether it is an electric or combustion engine, explains the CEO.

Big goals, weak results

Polestar was listed on the New York Stock Exchange in 2022 with a value of around 11.5 billion pounds – equivalent to around 13.5 billion euros. Since then, however, the company has lost 60 percent of its value and failed to meet key delivery targets. Polestar posted losses of $1 billion and $1.3 billion in 2021 and 2022, respectively, and was in the red by $735 million after the first nine months of 2023.

Before going public, Polestar promised to deliver at least 155,000 vehicles annually by 2025, but that is unlikely to happen. In 2023, the Polestar electric car brand sold around 54,600 vehicles, which was a six percent increase compared to the previous year, but remained below expectations. Despite lowering its forecast again in November to 60,000 vehicles, the company fell short of its target by nearly ten percent. The expectation had been reduced from the original 80,000 to 60,000 to 70,000 vehicles.

The entire electric car market is currently suffering from a downturn in the UK consumer market which even declined slightly last year. New data from the Society of Motor Manufacturers and Traders (SMMT) is said to show that half of UK drivers want to wait until at least 2030 to switch to an electric car, which is unlikely to make the current situation any better. After Volvo, Polestar’s former parent company, announced it would end its financial support, the company received a $1 billion bet from a bank. This happened due to a series of missed targets and a collapse in the share price. The loan is a big help for Polestar as it aims to be profitable by 2025. However, the company has said it will need a total of $1.3 billion to reach that goal, which will require an additional $350 million by then, it said.

Polestar also recently announced a shareholding restructuring that will see Chinese car giant Geely acquire a majority stake in the company. Geely is already a major shareholder, Polestar cars are manufactured in Geely factories in China and then exported to Europe and the United States. This could cause problems in the coming years, as a more negative view of Chinese-made electric vehicles is emerging in the US and Europe. The European Union is considering punitive tariffs on Chinese companies, while US President Joe Biden has warned that Chinese cars are “danger to national security” to represent American citizens. And now, according to The Telegraph, British authorities also want to consider whether an investigation should be launched.

Polestar relies on premiums – “that’s what entices customers”

Polestar plans to open more production lines in the US and South Korea to reduce pressure on the company. Ingenlath is very useful in comparison with American manufacturers. Tesla targets the middle class with models like the Model 3 and Model Y, while Polestar’s cars are priced higher and appeal to more affluent customers. In this country, Polestar 2, 3 and 4 models cost between 46,000 and around 70,000 euros. Ingenlath emphasizes that Polestar does not aim to cater to the mass market and compete with traditional automakers in this segment.

Polestar’s focus on affluent drivers could help offset the decline in electric car sales, according to Ingenlath. He argues that the withdrawal of other less committed brands from electric mobility will benefit the company because there will be less competition in the high-performance car sector.

Customers would appreciate the innovation of the electric drive train, especially in the charging segment. This strategy has proven itself and will continue to influence in the future, says the manager. After the all-electric Polestar 2, the SUV Polestar 3 and the SUV coupe Polestar 4, the Polestar 5 Grand Tourer is set to hit the market later than planned, at the beginning of next year.

Sources: The Telegraph – Drivers are ‘fearful of change’, says electric car maker Volvo