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Polestar wants to change almost everything about how you own a car

September 4, 2018

 

Two older gentlemen walk up the stairs of the Polestar booth at Pebble Beach. "What is this?" one asks the other as they marvel at the design. An employee walks up and explains that the Polestar 1 is the automaker's first car. A hybrid that'll be the last vehicle the company builds with a gas engine. They take photos and continue to chat with the representative. I watch it happen again and again. People, unaware of the car and company, are stopping by to look at a very beautiful car.                       

 

It's great for Polestar for people to learn about its vehicle at an event, but it's also a problem.

Polestar is the performance (and now electrified) brand of Volvo. It's first electrified car, the Polestar 1 hybrid will have 600 horsepower and a carbon fiber body and cost a whopping $155,000. It takes design cues from the Volvo car lineup but is decidedly more aggressive. It's also the first and only hybrid to come from the automaker. All future vehicles will be EVs.

 

The first will be the Polestar 2 which will start at more manageable $40,000. It'll also be the first car that veers slightly from the Volvo-inspired design language according to the company. If it's as clean while exuding aggression like the Polestar 1, the automaker could have a hit on its hands. But announcing a car as a new company and actually building at scale are two very different things. But Polestar does have an advantage over other new car makers.

 

On one hand, Polestar is like an automotive startup. It doesn't have legacy vehicles to contend with and sell while it slowly transitions to electrification. It can just start building cars anyway it wants. But it's also got the backing of a major automaker.

"We've got the back up of Volvo in terms of technology and platform which is something that none of the other startups who are appearing left, right, and center, they don't have that." said Jonathan Goodman, global COO of Polestar. "They know how to build a factory. They (Volvo) know how to build a car and the platform is a good one."

 

Every few months an automotive startup announces its intention to build the EV of the future. The Faraday Futures, Lucids and Bytons of the world shouldn't be dismissed. Plus there's the automaker that re-energized the electrification of four wheels, Tesla. EVs still only represent a very small percentage of cars sold today. Yet, the list of electrified vehicles coming to showrooms in the next few years continues to grow. To lure customers toward its offerings, Polestar sees subscriptions and new retail experience that more closely resembles the Apple store than a showroom as its ticket to putting cars in the hands of new owners.

 

At the heart of the idea is Care by Volvo. The subscription service launched this year by the Swedish automaker is an almost all-inclusive service. The single monthly payment includes the car lease, insurance, service, wear and tear, and roadside assistance. There's no down payment and the idea is that all you really pay for is gas. It's an offer that's intriguing enough that Volvo underestimated how many people would want it and the initial launch encountered unexpected delays.

 

By the time the Polestar 1 launches in late 2019, Goodman is hoping that regulatory issues won't hold up the vehicle's launch or how the company sells the car. "We've got to be respectful of franchise legislation." Like other automakers (except Tesla), Polestar will sell through franchises. "But I don't think that stops us from saying, 'well on the other hand we do want you to do it a little differently,'" Goodman added.

 

"Differently" means a retail experience where people come in and talk to sales associates that aren't paid by commission and help you order the car specifically for you. Goodman believes that most people don't want to order their car over the internet sight unseen. You can do that if you want, but a car is a huge investment so it's probably best to actually sit in one before you throw cash at an automaker.

When you get the car, its the services that Polestar believes will keep you coming back. For example, the car can be picked up, serviced by the local dealer and returned to you at no extra cost while you're at work. Polestar is also talking with charging companies to add their network into the Volvo app. So you don't need to open multiple apps to find a charger, you just use the one for your car. "What we want to be able to offer to the Polestar 2 customer is a booking, charging, paying system whereby they have one app and that gives them access," Goodman said.

 

A new retail experience, subscription-based, almost worry-free ownership and services and apps that reduce most of the friction of car and EV ownership? Polestar sounds like a startup promising big changes to the automotive world. Like with Care by Volvo's launch, there are bound to be some hiccups along the way. But unlike your typical startup, the automaker can get through them with the backing of Volvo. In other words, it's the automotive startup that might actually deliver on all of its promises in a timely manner. That's their killer feature.

 

 

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