Familiarity breeds content as Polestar progresses in EV marketplace

A digitally-led Scandinavian brand that’s best known for tuning up Volvos, has no dealerships and wants to interact with all its customers via a mobile app might not seem like one that would resonate well with the fleet industry, but factor in the words “electric car” and Polestar’s success with corporates makes more sense.

Having launched in 2020, the Polestar 2 – currently the brand’s only model – has exceeded all expectations. Registrations have grown from 850 in the first year to more than 4,000 during a tumultuous 2021. This year, Polestar is expecting to deliver around 7,500 2s and thinks it could do a lot more.

Where are these sales coming from? Well, 75% of Polestar 2 customers are company car drivers.

Attracted by its simplicity, performance and exclusivity, the car, which was initially designed as a Volvo concept, has helped Polestar to eclipse the likes of Alfa Romeo, DS and Subaru in the annual registrations rankings and puts it on track to become a key player in the premium electric car segment.

Polestar head of sales Matt Hawkins (pictured) says: “A lot of people have been hesitant about switching because a lot of electric vehicles (EVs) on the market have been built deliberately to be very different to their internal combustion engine (ICE) counterparts. With the Polestar 2, the car was always built to be an EV, but it still looks and feels as you’d expect. If you’ve come out of a traditional diesel or petrol saloon and get into a Polestar, it doesn’t feel other worldly, it’s still got a proper door handle, you’ve still got a gear selector that sits in the middle of the centre console, it’s still got an instrument binnacle. It feels very familiar as a car.”

These attributes, along with strong residuals and competitive running costs, enabled the Polestar 2 to score the Best Zero Emission Car title at the 2021 Fleet News Awards.

The car’s range of up to 299 miles, combined with its rapid charging speeds and smart Android-based infotainment system, has won over drivers, despite costing £50,000.

Two single motor derivatives

Since its launch, Polestar has expanded the line-up with two new single motor derivatives. The entry-level car is priced from £40,900, making it far more accessible to drivers with leasing costs closely aligned to familiar German diesel saloons.

Hawkins says: “Bringing in the single motor and making the Pilot Pack and the Plus Pack optional extras allowed us to bring the price point right down. The single motor variants were really well received by the fleet market. I think the other thing that helps as well as from a cost point of view is the duty of care element. A lot of businesses that had their company car drivers driving around in a diesel saloon car with 150hp for the past 15 years don’t suddenly want to put them into a 400PS all-wheel drive performance car.”

The more modest Polestar 2 Standard Range serves up 230PS and can cover 294 miles per charge, while the Long Range version is good for 336 miles.

“We launched our retail PCP (personal contract purchase) finance offering at the end of January and that’s been extremely successful. But the percentage of retail is still staying around about the same. And that’s purely because of the growth in fleet. So, even though retail is growing significantly, it’s not growing its share of our overall order take, even though the absolute volume is growing, because the fleet volume is growing so much,” Hawkins adds.

Since joining the brand last year, alongside head of fleet sales Debbie Hunt, Hawkins has expanded the UK fleet sales team to five people and he says that will shortly grow to six. He explains:

“Fleet has always been at the front of my mind in terms of where we need to build Polestar."

Polestar’s corporate structure is focused around leveraging the weight of the brand and the growing amount of demand and awareness about it.

Hawkins adds: “We’re trying to make sure that we’re as efficient as possible by leveraging the relationships that we have with leasing companies. Rather than trying to find every single business that wants to buy electric vehicles, we want to dovetail with existing relationships that leasing companies have with end users.”

Polestar is largely reliant on marketing and events to raise awareness of its vehicles. The brand is opening a number of Polestar Spaces, which allow people to interact with no sales pressure. There are currently three, located in London, Manchester and Solihull (pictured).

Hawkins says you can enter a Polestar Space as a retail driver, a company car driver, a salary sacrifice taker, a fleet manager, or as somebody from a leasing company and expect the same experience.

Those that opt for a Polestar can expect a ‘VIP experience’, which includes a face-to-face handover and an automated aftersales process. Working with logistics provider BCA and the Volvo retail network, Polestar has established a new way of operating without its own dealerships.

However, as a new brand, building awareness remains a challenge for Hawkins and his team.

He says: “Polestar has been very well received as a brand by all of the people who know what Polestar is and who are connected to the industry. But, I’m still really conscious of the fact that a lot of company car drivers aren’t necessarily car people. They see Polestar on their choice list, but a lot of them will just skip past it because they don’t know what it is.”

Demand outstripping supply

Vehicle supply issues have been an overarching theme in the automotive sector during 2020 and 2021. While some of the component shortages begin to ease into 2022, many manufacturers are still quoting lead times for some new vehicles of more than a year.

Polestar has suffered similar supply constraints, but they have mainly come from the capacity of its factory rather than a shortage of parts.

Lead times currently stand at four-to-five months, driven almost exclusively by high demand.

Hawkins says: “Demand is such at the moment that the longer people are waiting to place orders, the longer they’re going to be waiting for the cars because the orders are coming in faster than the factory can build them.

“It’s a lovely position to be in from our point of view. But, we’re really conscious that we don’t want to disappoint customers.”

Polestar is planning to launch a new car every year for the next three years, starting with Polestar 3, and plans to increase its presence to at least 30 global markets by the end of 2023.

Polestar 4, a smaller electric performance SUV coupé, is expected to follow in 2023. In 2024, the Polestar 5 electric performance four-door GT is scheduled for launch as the production evolution of Polestar Precept (seen below) – the manifesto concept car that Polestar released in 2020 which showcases the brand’s future vision in terms of design, technology, and sustainability.

Hawkins says: “I think that the next models we bring out, particularly the 3 and 5, they are far more niche. Because there’ll be bigger, more expensive cars, I think they’ll sit, from a corporate point of view, in the high-end management grades. They won’t be mainstream company cars like the 2.

“Polestar 3 will be a large SUV, so that’s going to be mainly retail and I think that helps to facilitate the growth of the brand because we’re actually going to be appealing to different demographics.”