Polestar grows as premium EV customers ditch Tesla

Tesla woes are Polestar’s gains with the premium EV brand predicting a steady trajectory for the year ahead.

The Polestar electric vehicle lineup

Premium electric vehicle brand Polestar is on the rise with vehicle sales up 13 per cent year on year as it attracts a broader customer base, including people shifting away from Tesla.

“We are seeing a few more people entering our showrooms now that are looking to trade away from the Tesla brand and move to our product,” Polestar Australia managing director Scott Maynard said.

“There aren’t that many choices when you get into premium EVs, and (the premium market) behaves very differently to the volume market. Polestar is a premium player and we are seeing a bit of migration from Tesla customers into what they perceive as a more premium-style vehicle and a brand that has well-founded values in its sustainability story, its moral and ethics story, its treatment of people, and that’s working out very well for Polestar.”

The Swedish premium automotive brand, part-owned by Volvo Cars, Geely Holdings and PSD Investment, has big ambitions for the year ahead with forecasts for its strongest year ever this year. While Tesla’s well-documented woes are a welcome boost, Polestar’s investment in new products, significantly SUV models, is helping to open up the brand to a broader range of customers.

“A lot of the early entrants to the EV scene were sitting in the sedan market and that makes up about 20 per cent of what’s being bought and sold in Australia,” Mr Maynard said.

“Now we’re seeing more electrified vehicles being offered up in the all-important SUV category and (with it) we see access to a much wider section of the market, and that’s true of Polestar, as we bring Polestar 4 and Polestar 3 to market, both SUV-style vehicles. We’re now seeing an uptake from a much wider, broader audience of customers, and that’s great for us.”

However, in the already crowded Australian automotive market, the arrival of a host of new brands is heating things up.

“It (is) arguably the most competitive marketplace in the world with a 1.2 million-car market being fought over by 65 to 70 brands (which) is almost unheard of in other developed countries,” Mr Maynard said.

The competitive set is a significant factor for Polestar, which wants to compete against premium automotive brands as well as premium EV brands. The brand believes it is making headway here with the Polestar 3 awarded the Drive Luxury Car of the Year in the under-$100,000 category, where it beat the Audi A4, BMW and Mercedes.

“We are competing with other premium brands and I’d like to think that if you were to jump in a car like Polestar 3, you could compare that against almost any car. And there are people that would choose to switch to electric to buy a Polestar rather than choose to buy Polestar to switch to electric.

“It wasn’t among its electric peers. (It won) because it’s a premium luxury car that won car of the year in its own right, regardless of what powered it. I think that’s important. It’s important for the electric vehicle industry to be able to compete for the quality of its car, the platform it sits on, and that company’s values and standards, regardless of its drive train.”

While EV marketing and messaging often focus on countering range anxiety or even the positives of the vehicles’ silence, Mr Maynard is keen to point out the low costs involved in maintaining a Polestar. The brand is also a big supporter of the proposed New Vehicle Efficiency Standard, which it hopes will encourage the uptake of zero-emission vehicles.

“The cost of keeping the car moving is significantly lower, particularly for those that have good electricity plans at home and can charge their cars there. But, even on the public charging network, it’s still substantially cheaper than having to pump fuel into a car,” he said. “These cars have far less moving parts, so the maintenance costs are a fraction of what you’ll pay to service a petrol or diesel car. Their intervals are longer, the service times are quicker, and the costs are a fraction of what it costs to maintain a petrol or diesel vehicle, and that’s an important point.”

However, when it comes to marketing, Polestar’s strategy is focused on its values and its brand story, a key differentiator within the EV category.

“There are so many brands that have been established less than five years ago. Polestar has a heritage in motorsport with Volvo, a history that dates back to the ’90s, so to be able to bring a brand story like that into the market with a current offering that is electric is something that sets Polestar apart from many of the electric vehicle brands that are competing with it,” Mr Maynard said.

“Consumers buying a premium product like to know that it’s been around and it’s been established over time. It’s not about just turning up to market and selling an expensive car. There has to be a value behind that brand and that value has to be earned, and it has earned over a period of time through close associations with all of the right partners and often in our industry through channels like motorsport.”

The strength of the brand’s history and its positioning around quality and excellence are important elements for its future growth, according to Mr Maynard. To help position for more growth locally, Polestar has expanded its retail partner network, which means it has doubled its footprint in Australia so consumers have greater access to the vehicles. Another key growth driver will be the launch of the Polestar 5 at the end of this year, which he predicts will be a halo moment for the brand.

“The Polestar 5 is a very special car. It’s a sports car. So this is a car that’s going to be a four-door coupe with some extraordinary performance numbers and perhaps more than its out-and-out performance numbers, the way that car rides and handles is going to be really special. It will speak to a very specific band of prospective customers and clients.”

Mr Maynard believes the brand has a significant opportunity to double down on the premium EV market and carve out a strong position, particularly if Tesla continues to falter.

“Being a premium player with a strong brand backing, I think there’s an opportunity for us as the premium EV market develops,” he said.

“More and more now the EV brands are starting to be considered by premium new car buyers and that will continue to develop over the course of 2025.”