At this point, it’s no secret that car dealers in the United States haven’t exactly welcomed electric vehicles with open arms.
Study after study shows that dealers aren’t excited to sell them. Car dealers’ lobbyists are among the loudest voices decrying regulations driving a more electric future market. And lately, even new efforts aligned with so-called “traditional” automakers like Sony-Honda Afeela and the Volkswagen Group’s Scout Motors brand are opting for a Tesla-like direct sales model instead of independent franchised dealerships.
Being an all-electric automaker, you might expect Polestar to be opposed to the franchised dealership model. But Michael Lohscheller, its new CEO, said he strongly believes dealers will be instrumental in making people aware of what the brand does.
Photo by: Polestar
“I see a much higher importance of dealers in general going forward,” Lohscheller told InsideEVs in a recent interview. “Polestar [has] direct distribution, and while that is a possibility for several people, I think in general, we need to be closer to our customers.”
Getting customers is key to any company’s success, but right now, Polestar needs the boost.
Lohscheller took the top job during a tough time for Polestar. The brand, owned by China’s Geely Holding Group, has endured years of financial losses, slowing sales and reported internal difficulties between Polestar and the company it spun off from, Volvo.
But perhaps Polestar’s biggest hurdle came from what its customers could even buy. For years, it has sold only one model, the Polestar 2, which remains a well-regarded Tesla Model 3 competitor but struggles in a world where SUVs and trucks dominate the sales charts. Plus, it’s built in China, so it now faces a 100% duty in the U.S. Globally, Polestar sold 44,851 EVs in 2024, less than Rivian sold in the U.S.—its sole market.
This year should be different. The Polestar 3 crossover, built in South Carolina, is already on the road. The Polestar 4 coupe-SUV arrives later this year and the Polestar 5 grand-tourer sedan should launch after that.
Photo by: Polestar
The goal is growth, Lohscheller said, but not as a mass-volume brand. Instead, it’s about more expensive models sold at higher profit margins, more upmarket than the Polestar 2 has been so far, and stressing performance as a key metric that separates Polestar from Volvo.
“Polestar is a performance brand by origin, and I want to highlight this a bit more,” he said. “The Polestar 3 is a good example. It’s obviously a very nice design with a lot of technology, but it’s an absolute performance car—and it’s an SUV. I think that more people should know about it, and more people should also have more fun driving it.”
Photo by: Polestar
Polestar 3 Performance (2024) im Test
Yet even with more models to choose from, Lohscheller said the Sino-Swedish EV brand needs a better way to meet people where they are. That’s why it won’t be shying away from dealers.
“If you buy or lease a car, it’s a super important decision,” Lohscheller said. “You want to understand the details of the offer. There’s a lot of explanation—[you need] an understanding of the technology of the car. You also have questions like, ‘Where can I service my car?'”
Right now, Polestar is fairly unique in the way that it sells cars—a “hybrid model” that allows someone to configure and order a car fully online and then have it delivered by a retailer. Buyers can also purchase from available inventory online, or visit a Polestar Space franchised dealership to see the cars in person, go for a test drive and place an order afterward or purchase from the limited stock on hand.
Photo by: Polestar
Lohscheller said Polestar currently has about 27 franchised dealers in the U.S. All of them are attached to Volvo dealers. It’s looking to add about six or seven more to that network this year, a “limited number in key locations,” he said. A Polestar Space that opened in December in Chicago is a good example, he said. It’s in big city in the middle of the country, and able to target a more affluent buyer.
In other words, the car-buying process is always complex, and with modern EVs it’s only getting more complicated. Online sales work for sales, Lohscheller said, but he thinks human interaction can work best for the education part. He envisions people coming back to retailers with questions, and getting to learn more about their vehicles.
The role of dealers is a hotly debated one within the auto industry as it moves toward more electrified and software-defined vehicles. Cars are becoming more and more complex to own, but also run on fewer moving parts, leading many dealers to fear that EVs could cut into their repair revenue. More than a decade of widespread anecdotes about dealers wanting to push buyers to internal combustion cars instead (not to mention lawsuits trying to stop Tesla from selling directly) has led some automakers to want to eliminate the third party and interface with buyers themselves. When Scout Motors announced a direct sales approach, Volkswagen’s U.S. dealers started a legal offensive to stop them. Honda’s partnership with Sony is drawing a similar response.
Photo by: InsideEVs
Polestar 3 First Drive: Jackson, Wyoming
Still, dealers do present advantages for test drives, in-person interactions and offering locations for easy repairs. Answering owners’ questions will be a big part of the strategy for the Polestar 3 in particular. Lohscheller described it as the “first true software-defined vehicle from Europe,” meaning that it has one central core computer from Nvidia that handles most of its software functions. It’s also fully upgradeable with over-the-air software updates. To date, only Tesla and Rivian have offered American buyers such a comprehensive end-to-end experience with software.
“We can actually improve this car as we go,” Lohscheller said. “At the end of the day, you get a better car when you go to sell it. Explaining that to people, making sure they understand that it’s something we can do digitally, I think it’s better when you have a personal discussion about that.”
Polestar 5 at Polestar Day 2023
Lohscheller said he’s optimistic about Polestar’s chances for growth in the U.S., especially as these new models join the lineup. And he’s particularly enthused about the Polestar 5: What it lacks in a rear window it makes up for with 884 horsepower, an 800-volt architecture, at least 300 miles of range and potentially some of the fastest DC charging speeds around.
“It is an amazing car,” Lohscheller said. “It’s really the ‘sports limousine,’ not comparable with other cars in terms of design and technical features.” The company is coming after Porsche, he said, and it doesn’t take that mission lightly.
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