Volvo’s New Polestar Is a Shot Across the Bows of Tesla and BMW

October 17, 2017, 6:06 PM UTC

In it’s previous life, Polestar was a hard-to-find high-performance brand under Volvo Cars. Now it’s being recast as an electric performance brand aimed at carving some market share away from Tesla.

Electric cars were often designed and marketed as the environmentally friendly do-gooder kind of purchase. They were considered, sometimes unfairly, as boring to drive. Words like “exciting” and “high-performance” and the “future” were rarely attached to these first vehicles. That is, until Tesla and its Model S sedan came along.

Now, Volvo, which has previously said all of its car models launched after 2019 will be electric or hybrids, is aiming for that electric-cars-are-fun-to-drive sweet spot that Tesla has dominated.

Volvo unveiled Tuesday the Polestar 1, the first model of its new electric brand. The company also announced plans to invest more than $750 million into the brand.

Polestar 1. Courtesy of Volvo Car Group
Courtesy of Volvo Car Group

Volvo, which is owned by China’s Zhejiang Geely Holding Group, will start producing the car in mid-2019.

The Polestar 1 is a 600 horsepower two-door grand tourer coupé. It is not an all-electric vehicle, which means this particular vehicle might not become the Tesla killer that others have suggested.

Polestar CEO Thomas Ingenlath noted Tuesday that all future cars from Polestar will be fully electric.

Polestar Is Ditching Dealerships

One of the more interesting components of the announcement has nothing to do with the actual car, but how customers will purchase it.

Polestar announced its cars will be only available online and offered on a two- or three-year subscription basis. Customers won’t need to put down a deposit either. The all-inclusive subscription will include pick-up and delivery servicing and the ability to rent alternative vehicles within the Volvo and Polestar range, all incorporated into one monthly payment, the company said Tuesday.

The brand is going to also open up “Polestar Spaces,” basically a gallery or showroom where customers can interact with the products. These “spaces” will be standalone facilities and not within existing Volvo retailer showrooms, the company said.

Volvo will also fold in other technology and services it’s been experimenting with in the past two years. Polestar is using so-called “Phone-As-Key technology,” which basically means customers will have the ability to unlock their car remotely using their smartphone.

Other automakers have implemented similar tech, which allows cars to be used for more than commuting to and from work. Owners can rent out their cars, for instance, using a car-sharing service. Or have items delivered to their car while at work.

Volvo’s Plans for Polestar

Polestar confirmed on Tuesday plans to build three electric models at a plant in Chengdu, China. the factory is under construction and is expected to be complete in 2018.

The Chinese-owned Swedish automaker acquired Polestar Performance in 2015 for its racing history and experience of making cars for the racetrack. Volvo did not buy the racing division of Polestar Performance.

Last year at the LA Auto Show, Lex Kerssemakers, then-president and CEO of Volvo Car USA, provided a hint about where Volvo was going to take Polestar.

“Are we going to make race cars in Volvo? No we are not,” Kerssemakers said in November 2016. “But we’re going to use that technology, that heritage, that experience to simply make better road cars— a better car which you can use 365 days a year.