Polestar backs new sales model to drive growth

A major plank in Sino-Swedish EV pure play Polestar’s strategy to recover from recent woes is, of course, the ramp-up of sales of its new Polestar 3 and 4 e-SUVs. But, despite the latter having been launched late last year, its rebound in sales in Q2 this year was driven almost entirely by its existing Polestar 2 product.

And the firm believes this is due to the change in its sales model that it has implemented in Norway and Sweden and will roll out more widely in the months to come.

Deliveries jumped from a Q1 slump of c.7,200 to around 13,000 in Q2, representing the firm’s fourth-best sales quarter in its short history. While volumes were still down 18pc year-on-year, this is progress from two consecutive quarters that showed annual drops of around 40pc.

“We had a tough start of the year, but then with a strong improvement in the second quarter,” says Polestar CFO Per Ansgar. Tellingly, neither of the new products contributed materially to the rebound.

“We sold quite some Polestar 4s in the last part of the 2023 and we also sold quite some in the first quarter,” Ansgar continues. “In the second quarter, there were very few, I would say around 200 or so. So, basically all sales, except some deliveries of Polestar 3, are related to Polestar 2.”

As such, rather than new offerings, the firm is attributing the recovery in deliveries to its shift to a non-genuine agent model. “With this shift, we activate our [Polestar] Space partners in the commercial process, going from being a distribution to a real sales channel, contributing actively in conversion and the order intake and making it easier for customers to actually purchase a car directly in the space,” explains Polestar CEO Thomas ingenlath. “We will also jointly increase significantly our retail footprint in all key markets, including the US.”

And it has contributed to “very strong development in our retail order intake, up [by] 169pc year-on-year”, Ingenlath continues.

The non-genuine agent model “means that we will be able to have more interaction and more work directly through dealers or investors to drive our sales, and we are expanding our point of sales”, Ansgar says. “Just as an example, in Sweden we are going from like 3.5 points or four points to maybe 10, 14 points, which is a very good thing. We will increase our volumes in a very simple and cost-efficient way.”

In the US too, the firm has expanded its sales point dealer network from 40 to 60.

First half order intake has “developed really strongly higher” than in previous years owing to the new model, Ingenlath says. “We definitely see how that can be a very powerful tool to make it much more commercially successful.”

And the success of Polestar 2 in Q2 has, the firm’ chief believes, created momentum and optimism among dealers ahead of rollout of the Polestar 3, “driving completely new energy levels into the sales organisation”.

The new model also reduces capex when Polestar is entering new markets, an advantage as it plots entry into seven new national markets next year. For France, as an example, the firm estimates additional headcount of only around 30.

Polestar will thus incur “very limited expenses to capture such a new big market as France”, Ingenlath boasts.