According to the news agency Reuters, Polestar is cutting 15% of its employees, more precisely 450 people worldwide. The reason is the challenging market situation.
A temporary decline?
In October, it was noted that growth in the global electric car market began to slow down. The situation is probably only temporary, but also a warning that the market may reach the saturation point earlier than expected. Right now, the economic outlook for most people is bleak, which affects sales of capital goods. Uncertainty with regard to electric car subsidies, charging and delivery times can also dampen demand.
What really creates challenges in the market is that Tesla - now as in the past - faces overproduction by cutting prices.
Polestar's sales target for 2023 was between 60.000 – 80.000 cars. In November, they adjusted the targets to 60.000, while actual sales figures ended up at 54.600 cars.
Toyota's chairman, Aiko Toyoda, has recently stated that the global electric car share is unlikely to exceed 30%. It is not unlikely that Toyoda's prediction could come true. One billion people live without electricity, and several large cities may have problems supplying electricity to an all-electric car fleet.
Polestar cuts price
Polestar has responded to Tesla's price cut by lowering the price of the Polestar 2 Long Range Dual Motor by NOK 48.000. Polestar 3 can be ordered already now, but it cannot be delivered until approximately 9 months from now - in September/October 2024. Until Polestar achieves full-scale production and rollout of new models, they are secured financing through loans from Volvo and Geely. One can imagine that it is the owners who have demanded that Polestar cut costs.
Polestar or Volvo?
Both Volvo Cars and Polestar are owned by Geely Holdings. Volvo also has a majority stake in Polestar. This means that Polestar - on paper - is controlled by Volvo. Then one can ask why Geely has chosen to operate with two different brands, and - seen with sober Western eyes - what is Polestar compared to Volvo?
- - A premium car brand? - Or perhaps a budget car brand?
- - A thoroughbred electric car brand? Although the Polestar 1 was not an electric car and Volvo is about to become an electric car brand as well.
- - A new Chinese car brand dressed in Swedish clothes?
- - A car brand with a digital sales link à la Tesla?
In 2022, Volvo sold 688.348 cars in total (about the same as Skoda and Citroen) while Polestar sold 46.946 cars (about the same as Lancia). How would the Polestar models sell if they carried the Volvo logo? And does the sale of Polestar offset the additional costs of keeping a separate car brand? Perhaps the future will show that.
In 2023, 1829 Polestar cars were registered in Norway - all Polestar 2. Corresponding figures for the Volvo XC40 were 4.875, and for the low-built Volvo C40, 1.400 registered cars. Would the Volvo-Polestar alliance sell fewer cars if the Polestar 2 was sold with the Volvo logo? You could then think that the new Polestar 3 could fill the model range like the Volvo EX60.
A price comparison
Imagine that you are looking for a car with "Long Range" and "Dual Motor", black paint, tow bar and winter tires - as well as all taxes and registration costs paid. The prices are calculated from the car manufacturers' websites. Tesla Model Y with the above equipment is priced today at 522 (including VAT). In the examples above, we see that the Polestar 338 can only compete on price with a reduced price. The Volvo EX2 can be an alternative to the other models, provided that you can manage with less space.
| Price | Note | Luggage compartment | frunk |
|---|---|---|---|
| 547.885*) | Polestar 2 Long Range Dual Engine | 405 | 41 |
| 606.700 **) | Volvo C40 Extended Range Twin Engine | 413 | 31 |
| 498.900 ***) | Volvo EX30 Ultra Twin Engine Performance | 318 | 7 |
*) Pilot package NOK 20.000 has been chosen because of Adaptive Cruise Control. Most people would probably also have chosen the NOK 40.000 Plus package to get the heat pump, electrically adjustable seats, panoramic sunroof etc. which are standard in the Tesla Model Y. Then the price would have ended at NOK 587.
**) Volvo's configurator does not allow you to choose separate summer tires and winter tires. Here you can only choose all-season tires. An addition of at least NOK 20.000 will be necessary to have the car shod with summer and winter tyres.
***) If you choose a long range and two motors in the Plus equipment level instead of Ultra, the price ends up at NOK 456.100. With Ultra (recommended) you get, among other things, a heat pump, panoramic roof, electrically adjustable seats and "queue assistant".
Polestar 2 vs. Volvo C40
The Polestar 2 and Volvo C40 share drivetrains, dimensions and performance and can be considered sister models. Like the Volvo C2, the Polestar 40 is built as a low-profile SUV. Initially, the two models were fairly similarly priced, although Polestar wins today at a reduced price. Will Volvo also lower the prices, do you think?
Polestar 2 vs. Volvo EX30
The new Volvo EX30 is set to become a favourite. In the Plus version with four-wheel drive, it will cost NOK 456.100 with towbar and winter tyres. The top model costs NOK 498.900. It's a nice little SUV for those who don't need a big boot, but it's expensive. The new Volvo model is a smaller and more affordable car than the Polestar 2 – and thus not competitors. It is nevertheless striking to see that the Volvo EX30 could just as easily have been a Polestar. Volvo's latest model has a design similar to the Polestar.
That makes it timely to ask the question once more: Polestar? We have Volvo!
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