CEO of EV Startup Polestar on the future of car buying

  • Polestar is a Swedish startup of electric cars that sells cars online and sends them to customers.
  • His CEO thinks it’s a hassle to go to a traditional dealer and cut for a deal.
  • Polestar plans to list on the Nasdaq on Friday.

Buying a new car once means going to a dealer and browsing through dozens of cars to find the one that, sort of, most fulfilled the desires. Next came negotiation and hope one got a good deal.

But times change.

Tesla turned buying cars upside down by avoiding dealerships and selling their electric cars directly to customers, who order cars online and take delivery at their doors. It’s more like ordering a Casper mattress than a pair of Warby Parker tents than the conventional car buying experience.

Polestar, a Swedish startup of electric cars that ran out of Volvo in 2017, is the next pack with a similar strategy. For CEO Thomas Ingenlath, selling cars without traditional dealers takes the head out of the old process and is clearly the better way for all parties involved.

The startup does not operate a purely direct-to-consumer model in the US as in other countries, but a hybrid. It sells cars to Volvo dealers who operate their showrooms, who then pass those cars on to customers. But the end result is the same: Buyers can order the car they want online in just a few clicks, see transparent prices and take home delivery, all without setting foot in an old-school dealer.

Customers do not have to ask if they are ripe, and, because cars are largely built to order, Polestar does not have to figure out how to dispose of excess production, Ingenlath Insider said in an interview.

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

The 2022 Polestar 2.

The 2022 Polestar 2.

Tim Levin / Insider

This transparency in pricing (the prices of Polestar lists online are just what buyers pay) may still be welcome, as a low supply of cars in the US encourages dealers to list significant markups on top of sticker price.

Polestar sells two models: the $ 155,000 Polestar 1 hybrid and the $ 48,400 Polestar 2, a fully electric sedan. And it has big plans to launch three more cars 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, helped by its Polestar Spaces, minimalist showrooms where potential buyers can be purchased with the company’s cars without being bothered by sellers. He thinks the auto industry as a whole will go in the direction of direct sales.

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

Indeed, start-ups of electric cars such as Lucid Motors and Rivian Automotive both ship cars directly to customers. And even long players make moves away from the old way. Going forward, Ford wants more people to order custom cars online and wait several weeks for delivery.

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