Volvo's Polestar 2 rollout threatened by China, U.S. trade dispute

Urvaksh Karkaria

Automotive News | 2019-3-8

Volvo¡¯s Polestar brand expects to launch its first battery electric sedan in the U.S. by early summer 2020. International trade tensions, however, could tap the brakes on that rollout. 

The automaker would not sell the Polestar 2 in the U.S. if tariffs on exports from China continue to rise, Polestar CEO Thomas Ingenlath told the  Financial Times   during the Geneva auto show. 

¡°The business case for bringing the car to the U.S. is highly dependent on the type of tariffs we have,¡± Ingenlath said. ¡°It wouldn¡¯t make sense to offer the car for a ridiculous price.¡±

The Polestar 2 will start at about $44,000, before tax incentives. But buyers will have to be patient. A well-quipped ¡°launch edition¡± will be the only model available during the first year of production and cost $63,000, before incentives.

Polestar expects to manufacture about 50,000 units of the Polestar 2 in its first full year of production, Ingenlath told the Financial Times. The EV is powered by two electric motors and a 78 kilowatt-hour battery, delivering 275 miles of range. The all-wheel-drive electric powertrain produces 300 kilowatts (408 hp) and can sprint from zero to 62 mph in under 5 seconds.

Polestar North America chief Gregor Hembrough has expressed similar tariff concerns.

Trade tariffs are ¡°complicating¡± the picture, Hembrough told  Automotive News  last month, noting Polestar vehicles would be ¡°a little more profitable for the U.S. marketplace and our retail partners¡± in the absence of tariffs.

¡°There¡¯s very little we can do at this point,¡± he said.

For now, Polestar¡¯s U.S. plans are unchanged, a spokesman told Automotive News on Thursday.

¡°We are 100 percent coming to the U.S.,¡± the spokesman said. ¡°The announced pricing is based on current tariffs.¡±

More EV plans
Polestar, headquartered in Gothenburg, Sweden, is the electrified performance brand of Volvo Cars, owned by Zhejiang Geely Holding Group Co. 

Polestar is said to have at least a half-dozen battery electric models planned over the next decade. In addition to the Polestar 2 and Polestar 1, a $155,000, limited-run hybrid sedan is expected to arrive this year. The automaker also has plans for an SUV, a sporty crossover and a roadster, a source said.

To sell its vehicles in the U.S., Polestar is adopting an experiential retail strategy, bringing the brand to where people congregate or shop. The brand will operate stores ranging from 2,000 to 2,500 square feet ¡ª referred to as ¡°spaces¡± ¡ª in high-traffic urban locations such as downtown districts, mixed-use developments and shopping centers. 

A small, no-inventory, no-service-center model will give retailers a ¡°very low entry ticket¡± to having a Polestar franchise, Hembrough said.

Polestar is in discussions with eight Volvo dealers to launch the North American retail network. By the end of 2020, Polestar expects to have stores in five West Coast cities and three Canadian cities. The West Coast is a natural launch market because it has high EV adoption, attractive government incentives and robust charging infrastructure. 

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