- Polestar is a Swedish electric-car startup that sells vehicles online and ships them to customers.
- Its CEO thinks going to a traditional dealership and haggling for a deal is a hassle.
- Polestar plans to list on the Nasdaq on Friday.
Something is loading.
Buying a new car used to mean going to a dealership and browsing dozens of vehicles to find the one that kind of, sort of, mostly met one’s wants. Next came negotiating and hoping one was getting a good deal.
But times are changing.
Tesla flipped car buying on its head by foregoing dealerships and selling its electric cars directly to customers, who custom-order vehicles online and take delivery at their doorsteps. It’s more like ordering a Casper mattress or pair of Warby Parker shades than the conventional car-buying experience.
Polestar, a Swedish electric-car startup that spun out of Volvo in 2017, is following suit with a similar strategy. For CEO Thomas Ingenlath, selling cars without traditional dealerships takes the headache out of the old process and is clearly the better way for all parties involved.
The startup doesn’t operate a pure direct-to-consumer model in the US like it does in other countries, but rather a hybrid. It sells vehicles to Volvo dealers that operate its showrooms, who then pass those cars on to customers. But the end result is the same: Buyers can order exactly the car they want online in a few clicks, see transparent pricing, and take delivery at home, all without setting foot in an old-school dealership.
Customers don’t have to wonder if they’re getting ripped off, and, since vehicles are largely built to order, Polestar doesn’t need to figure out how to get rid of excess production, Ingenlath told Insider in an interview.
“The predictability for the people who invest into the brand is very clear, the prices that customers see are real, and there is no dumping or whatever happening. So I think all sides recognize that this is a very modern and good and profitable way forward,” he said.
The 2022 Polestar 2.
This transparency in pricing (the prices Polestar lists online are exactly what buyers pay) may be even more welcome as a low supply of vehicles in the US encourages dealers to charge hefty markups on top of sticker price.
Polestar sells two models: The $155,000 Polestar 1 hybrid and the $48,400 Polestar 2, a fully electric sedan. And it has grand plans to launch three more vehicles and boost annual sales tenfold by 2025. The company plans to list on the Nasdaq on Friday under the ticker PSNY.
Ingenlath takes pride in Polestar having a more direct relationship with its customers, aided by its Polestar Spaces, minimalist showrooms where potential buyers can get acquainted with the company’s vehicles without being hassled by salespeople. He thinks the auto industry as a whole will move in the direction of direct sales.
“We believe that this is the modern way,” he said. “Will it all be exactly the same? No. But generally the detachment that existed between the car producer and the end customer — I don’t think that anybody is happy about this detachment.”
Indeed, budding electric-vehicle startups like Lucid Motors and Rivian Automotive both ship vehicles directly to customers. And even longtime players are making moves away from the old way. Moving forward, Ford wants more people to custom-order cars online and wait several weeks to take delivery.