Is Polestar on the ropes?
Discussion
From the Telegraph:
"Polestar, which is controlled by Sweden’s Volvo and China’s Geely, confirmed on Wednesday the resignation of long-time boss and founder Thomas Ingenlath. He will be replaced from October 1st.
His resignation comes after sales of the Swedish company’s upmarket electric cars slumped. Global volumes fell 40% in the first quarter of 2024 to 7,221, down from 12,076 the previous year.
Once valued at more than $20bn (£15bn), Polestar’s valuation has plummeted to around $2bn since it went public in 2022. Its shares, listed in New York, are down 41% this year alone.
The carmaker, headquartered in Gothenburg in Sweden, lost close to $1.5bn over the course of 2023"
Their global revenue in 2023 was $2.38bn so losses at that scale would seem to be unsustainable, particularly with sales in 2024 being 40% down on the same period in 2023.
So what has gone wrong? And do we think that Polestar is on the ropes and about to go down?
"Polestar, which is controlled by Sweden’s Volvo and China’s Geely, confirmed on Wednesday the resignation of long-time boss and founder Thomas Ingenlath. He will be replaced from October 1st.
His resignation comes after sales of the Swedish company’s upmarket electric cars slumped. Global volumes fell 40% in the first quarter of 2024 to 7,221, down from 12,076 the previous year.
Once valued at more than $20bn (£15bn), Polestar’s valuation has plummeted to around $2bn since it went public in 2022. Its shares, listed in New York, are down 41% this year alone.
The carmaker, headquartered in Gothenburg in Sweden, lost close to $1.5bn over the course of 2023"
Their global revenue in 2023 was $2.38bn so losses at that scale would seem to be unsustainable, particularly with sales in 2024 being 40% down on the same period in 2023.
So what has gone wrong? And do we think that Polestar is on the ropes and about to go down?
Well I did mention them in the which manufacturer is going to go bust discussion… Perhaps not that surprising that the CEO is leaving given their challenges. They probably need somebody more hard nosed. If the EU goes ahead with the +20% tariff for Polestar, things will get really bad I would have thought. Maybe that will tip them over. Lotus can’t be far behind either.
While car companies rarely go bust probably because of politically sensitive manufacturing jobs etc, these are Chinese manufacturing jobs so hard to know. Geely seem to spool up new brands as well every now and then so can presumably unspool a couple. Their latest battery innovations are branded Zeekr so it’s not like they’re putting the unique IP under Polestar or Lotus either. Possibly to protect the IP against any bankruptcy.
While car companies rarely go bust probably because of politically sensitive manufacturing jobs etc, these are Chinese manufacturing jobs so hard to know. Geely seem to spool up new brands as well every now and then so can presumably unspool a couple. Their latest battery innovations are branded Zeekr so it’s not like they’re putting the unique IP under Polestar or Lotus either. Possibly to protect the IP against any bankruptcy.
New EV cars are not selling that well in the UK, 2nd hand ones are though. The pool of customers actively wanting a newEV is probably drying up, and incentives on used EV's are getting much better - i know- i've just bought a year old EV with 3k miles on the clock at £30k off list price with decent finance terms.
Looking at the EV stock levels of the European manufacturers on autotrader - they have loads unsold. It's not just Polestar.
Ingelnath could be heading to Jaguar Land Rover??
Looking at the EV stock levels of the European manufacturers on autotrader - they have loads unsold. It's not just Polestar.
Ingelnath could be heading to Jaguar Land Rover??
I think a problem for polestar is lack of versatility.
The polestar 2 is a very good car. But its limited to a small pool of the fleet market.
Too expensive and does not have brand loyalty (compared to the inferior i4)
Not as versatile as a model Y
Still relies on the ropey and expensive public charging network.
Reminds me of Saab in many ways.
The polestar 2 is a very good car. But its limited to a small pool of the fleet market.
Too expensive and does not have brand loyalty (compared to the inferior i4)
Not as versatile as a model Y
Still relies on the ropey and expensive public charging network.
Reminds me of Saab in many ways.
Mouse Rat said:
I think a problem for polestar is lack of versatility.
The polestar 2 is a very good car. But its limited to a small pool of the fleet market.
Too expensive and does not have brand loyalty (compared to the inferior i4)
Not as versatile as a model Y
Still relies on the ropey and expensive public charging network.
Reminds me of Saab in many ways.
Saab lost the plot when they re-badged the vauxhall Vectra as the 93 and dropped the quirky and individual designs that their very loyal customers valued them for.The polestar 2 is a very good car. But its limited to a small pool of the fleet market.
Too expensive and does not have brand loyalty (compared to the inferior i4)
Not as versatile as a model Y
Still relies on the ropey and expensive public charging network.
Reminds me of Saab in many ways.
Tagnot said:
Saab lost the plot when they re-badged the vauxhall Vectra as the 93 and dropped the quirky and individual designs that their very loyal customers valued them for.
Even if their business model was viable when they started to sell out to GM in 1989, it certainly wouldn't be today. The economies of scale just don't work for independent car makes of that size anymore, unless they're selling exotica and huge prices. I guess in many ways Polestar is currently quite like the post-GM Saab, though - part of a huge multinational conglomerate trying to work around the limitations of the parent company's platforms to create "premium" products, which is never easy.
giveitfish said:
Hard to see the point of Polestar as a standalone brand - before it was the stylish electric Volvo, but now Volvo have full EVs of their own, surely Volvo themselves will steal Polestars lunch?
They're supposed to be stylish sporty EVs. Which is of course also what Lotus is trying to do on similar platforms. From what I can tell from more driving focused reviews, the new Polestars are quite good and better to drive than the Lotus's which seem to be more comfort & luxury oriented. Volvo is trying to be Volvo even if their latest example (EX30) is not a Volvo by normal Volvo standards. It seems Geely just likes to churn out alternatives with not exactly clear delineations. Oh well.
Polestar also went full on Tesla model with no dealers etc which was very "smart" when they had an existing Volvo network to tap into. But I guess they wanted to be the cool new thing and not be dragged down by Volvo uncool.
The 2 came along at the right time as a Tesla Model 3 alternative for people who wanted a similar formula of fast enough, good enough range, roomy enough, affordable enough. Had some cred with the Volvo association but the earlier adopters 4+ years ago weren't so fussed about brands. Plus Covid meant the online/dealer-less model wasn't really an issue.
3 and 4 now are playing in the £60-90k space and there's far more competition now from the established brands, including Volvo itself. We're into the "early majority" of the adoption lifecycle and they're more conservative and likely to stick with brands they know.
There's a big new Volvo showroom opened near me which will service Polestar but don't do sales - there's only 8 physical "spaces" where you can go and look at one. For the entire south-east that's going to Battersea.
3 and 4 now are playing in the £60-90k space and there's far more competition now from the established brands, including Volvo itself. We're into the "early majority" of the adoption lifecycle and they're more conservative and likely to stick with brands they know.
There's a big new Volvo showroom opened near me which will service Polestar but don't do sales - there's only 8 physical "spaces" where you can go and look at one. For the entire south-east that's going to Battersea.
All Polestar production is in China I think? That, therefore probably means the USA is off limits for them with the extra 100% tariffs just imposed. They then have a new issue with the EU tariffs just announced which will make their cars even more expensive in the EU or reduce any profit.
So as a "European" brand they then, currently, are left with only the UK, Norway and possibly Switzerland to sell in at any sort of competitive price.
So as a "European" brand they then, currently, are left with only the UK, Norway and possibly Switzerland to sell in at any sort of competitive price.
confused_buyer said:
All Polestar production is in China I think? That, therefore probably means the USA is off limits for them with the extra 100% tariffs just imposed.
They are building the P3 in the USA to get around thisI love my P2 but feel they are competing in the wrong space. They should be aiming for the Tesla, Kia, Audi market rather than trying to compete with Porsche where many buy based on brand name and they don't have an established enough brand to lean on.
The P2 is the best car I've ever owned and the newer models also get rave reviews from those who have driven them so it isn't an issue of a poor product, just that the buyers they are targeting don't want them.
They also seem to have issues actually building and supplying cars. You can't order a factory built P2 in the UK just now, the P3 has been delayed again and the P4 has only started being delivered in the last couple of weeks. You can't make money if you don't have cars to sell.
Tagnot said:
Saab lost the plot when they re-badged the vauxhall Vectra as the 93 and dropped the quirky and individual designs that their very loyal customers valued them for.
They had no choice as the quirky cars their customers loved didn't make any money, even then they managed to spend more than they made hence they went pop. It wasn't a case of a profitable business becoming loss making due to a change in product strategy, it was a loss making business continuing to make losses regardless of the product.
Tagnot said:
Mouse Rat said:
I think a problem for polestar is lack of versatility.
The polestar 2 is a very good car. But its limited to a small pool of the fleet market.
Too expensive and does not have brand loyalty (compared to the inferior i4)
Not as versatile as a model Y
Still relies on the ropey and expensive public charging network.
Reminds me of Saab in many ways.
Saab lost the plot when they re-badged the vauxhall Vectra as the 93 and dropped the quirky and individual designs that their very loyal customers valued them for.The polestar 2 is a very good car. But its limited to a small pool of the fleet market.
Too expensive and does not have brand loyalty (compared to the inferior i4)
Not as versatile as a model Y
Still relies on the ropey and expensive public charging network.
Reminds me of Saab in many ways.
Anyway on topic how many manufactures after Tesla are not loosing money? Polstar are just one of the many loosing big time. Personally I don't believe of once the UK needs to any more than scrap Net Zero and come up with something sensible.
Wills2 said:
Tagnot said:
Saab lost the plot when they re-badged the vauxhall Vectra as the 93 and dropped the quirky and individual designs that their very loyal customers valued them for.
They had no choice as the quirky cars their customers loved didn't make any money, even then they managed to spend more than they made hence they went pop. It wasn't a case of a profitable business becoming loss making due to a change in product strategy, it was a loss making business continuing to make losses regardless of the product.
True fact: the 9-5 and the Holden Monaro are the only cars GM owned that share the same folding cup holders.
KingGary said:
Not that surprising, EV sales are behind schedule and governments don’t have the money to keep subsidising them. I also read somewhere that BMW now outsell Tesla. It’s a market in turmoil with an uncertain future, bound to be casualties along the way.
The government still seem to have no problem spaffing £11.6 billion of taxpayers (yours and mine) money on climate projects in other countries. Meanwhile Labour claim that there is a £22bn black hole in the budget. Someone is either telling porkies or it has misplaced priorities - likely both.KingGary said:
Wills2 said:
Tagnot said:
Saab lost the plot when they re-badged the vauxhall Vectra as the 93 and dropped the quirky and individual designs that their very loyal customers valued them for.
They had no choice as the quirky cars their customers loved didn't make any money, even then they managed to spend more than they made hence they went pop. It wasn't a case of a profitable business becoming loss making due to a change in product strategy, it was a loss making business continuing to make losses regardless of the product.
True fact: the 9-5 and the Holden Monaro are the only cars GM owned that share the same folding cup holders.
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