CEO of EV Startup Polestar on the future of car buying

CEO of EV Startup Polestar on the future of car buying

CEO of EV Startup Polestar on the future of car buying

  • Polestar is a Swedish electric car start-up that sells vehicles online and ships them to customers.
  • The CEO thinks going to a traditional dealer and haggling over a deal is a hassle.
  • Polestar plans to list on the Nasdaq on Friday.

Buying a new car used to mean going to a dealership and searching through dozens of vehicles to find the one that largely met your needs. Then they negotiated and hoped to get a good deal.

But times are changing.

Tesla turned car buying on its head by forgoing dealerships and selling its electric cars directly to customers, who order custom vehicles online and have them delivered to their door. It’s more like ordering a Casper mattress or some Warby Parker shades than the conventional car buying experience.

Polestar, a Swedish electric car startup that emerged from Volvo in 2017, is pursuing a similar strategy. For CEO Thomas Ingenlath, selling cars without traditional dealers takes the headache out of the old process and is clearly the better way for all parties involved.

The startup does not have a pure direct-to-consumer model in the US as in other countries, but rather a hybrid. It sells vehicles to Volvo dealers who operate its showrooms, who then pass these cars on to customers. But the end result is the same: in just a few clicks, buyers can order exactly the car they want online, see transparent prices and have it delivered to their home, all without setting foot in an old-fashioned dealership.

Customers don’t have to wonder if they’re being ripped off, and since vehicles are largely built to order, Polestar doesn’t have to figure out how to get rid of excess production, Ingenlath told Insider in an interview.

“The predictability for the people who invest in the brand is very clear, the prices that customers see are real and there is no dumping or anything. So I think all parties recognize that this is a very modern, good and profitable way is to move forward. ,” he said.

The 2022 Polestar 2.

The 2022 Polestar 2.

Tim Levin/Insider

This transparency in pricing (the prices Polestar lists online are exactly what buyers pay) is perhaps even more welcome as a low supply of vehicles in the US encourages dealers to charge hefty surcharges on top of the sticker price.

Polestar sells two models: the $155,000 Polestar 1 hybrid and the $48,400 Polestar 2, an all-electric sedan. And it has big plans to launch three more vehicles and increase annual sales tenfold by 2025. The company plans to list on the Nasdaq Friday under the ticker PSNY.

Ingenlath is proud that Polestar has a more direct relationship with its customers, aided by Polestar Spaces, minimalist showrooms where potential buyers can discover the company’s vehicles without being hassled by sellers. He thinks the auto industry as a whole will move toward direct sales.

“We believe this is the modern way,” he said. “Will it all be exactly the same? No. But in general the detachment that existed between the car manufacturer and the end customer – I don’t think anyone is happy with this detachment.”

Indeed, fledgling electric vehicle start-ups such as Lucid Motors and Rivian Automotive are shipping vehicles directly to customers. And even old players are taking steps away from the old way. In the future, Ford wants more people to order custom cars online and wait several weeks for them to be delivered.