Can Volvo’s Polestar Compete With Tesla In The U.S.?

[Music] polstar is an electric vehicle startup that broke onto the scene in 2017 with grand ambitions to take on tesla and become a coveted ev brand a brand with the mission of guiding star a company that would lead the way and show where the modern car industry is going polstar is tapping into the growing ev market which is expected to reach 985 billion dollars by 2027. the company has been selling a limited release performance hybrid and just recently brought its first fully electric car to market the polestar 2 to compete with tesla's model 3. it's also announced plans to start production of an electric suv next year they come out with their third vehicle within five years i mean for an auto brand to do that as a startup it's pretty impressive [Music] polestar was created by legacy automaker volvo and chinese auto giant gili it just recently raised 550 million in april and marks the first time the company has taken outside investment volvo and jill if we're the founding partners we have a high interest in having investors with a clear conviction about the brand and a dedication in terms of long-term funding as of right now they're actually still potentially looking for additional capital starting a new eb brand and launching evs is not cheap plus the company is up against an increasing amount of competition pollster in the us is very little known and it has a lot of catching up to do to the likes of tesla or even some of the more established players in the market right now the number of launches over the next couple of years is mind-blowing so it's going to be hard to stand out the fact that they got there and have had at least some buzz about them before a lot of other brands get there i think is a positive form the swedish automaker was established in 2017 but before becoming an eevee startup the polestar name was originally known for racing it does have a racing heritage the thought was then let's let's take that that brand that has some recognition and let's leverage that in a way that creates its own brand within the ev space it isn't necessarily an eevee startup like it rivien or kind of like tesla was it's actually backed by an established automaker like mobile and geely so it essentially can operate as a startup within the larger automaker prior to leading polestar its ceo was the head of design at volvo design and making products that are highly desirable and beautiful and have that very strong powerful scandinavian design is one of the key elements we have very much in focus design you know certainly you can see the the lineage and the linkage to volvo but it also is a unique unique product and i think a unique offering we have obviously established ourselves now within european markets within asia-pacific and of course within the americas this year we've been expanding into a further ten markets so denmark austria finland and luxembourg really linked to belgium we're also expanding in australia singapore hong kong thailand malaysia with all of the excitement in the electric vehicle space the company has reportedly been exploring the possibility of going public oprah gave out a bunch of core vests one time to everyone in our audience wall street is kind of giving up spax to any eevee startup that wants one [Music] polstar's first vehicle was a limited run 155 thousand dollar hybrid the polstar won 2017 we launched the brand together with a car and it is carbon fiber body on a hybrid chassis very unique a halo product it was the introduction to the world of what pole star is the poster one showed people we're gonna do performance that is gonna have distinctive design the automaker is only making 1500 of the cars it was an interesting approach to go extremely limited and then build upon that and build upon the buzz and and so far it appears to be working for him its next vehicle was an all-electric four-door sedan the polstar ii which it started shipping last year polstar 2 is the main vehicle that we have available in the market fully battery electric we launched with two electric engines over 400 horsepower it actually got very good reviews many analysts hailed it for its design and also the ergonomics of the vehicle the interior functioned very well it stands out in the marketplace right now pricing of the vehicle starts at 59 900 with different price options depending on motor and battery configuration we launched with one model which is a long range dual motor we now have long range single motor and standard range single motors with evs because the two major cost elements are battery and the electric motor if you can adjust and pair those down without too much of a compromise it gives a consumer another option and i think right now having those options and having something in a slightly more affordable piece of the market i think is a smart move the initial rollout hit some bumps in the road there was a safety recall due to faulty inverters with about 4 500 vehicles impacted execution of a launch is obviously critical especially with the new brand they had a little bit of a hiccup but but certainly have rolled past that polestar hasn't released any sales numbers but analysts estimate it has been selling well the vehicle's done well in in europe roughly 10 000 units last year but i think the main markets for them europe north america and china are going to feed that growth you know essentially to a 100 000 units or and above the company is looking to increase sales in the us with its upcoming suv their ceo he said that that was going to be their new flagship vehicle and it was going to be higher up market than let's say the poster ii a new electric architecture for this as a base super nice suv on it high tech with capabilities in there which of course will prepare for the road towards autonomous drive little has been announced about the car but polstar says it will go into production in 2022. i think three is an extremely important vehicle for them that's really the vehicle that likely will will push them into a certainly a higher volume brand the company has also announced two additional vehicles for down the line the precept a futuristic concept looking car and the xero project which is set to be released by 2030. the pulse star precept was clear statement of where we wanted to take the design language for for the brand moving forward project zero that was clearly about declaring that moonshot goal of bringing a car that has a zero co2 burden when it leaves the factory gate their commitment to sustainability you know it lines up with with what consumers and really what the the market is interested in right now while relatively new pulsar has benefited from its relationship with volvo giving it a solid foundation to build its cars pulse service engineering technology is pretty sound at this point starts with a very good base with the mobile vehicles they've been praised for the safety and the technology of their vehicles including some of the driver assist systems we do not have to reinvent reinvest and do everything from scratch when it comes to logistic chains but as well when it comes to manufacturing footprint polstar manufactures its cars at factories in chengju and lucha china and then exports them around the world but building the vehicles in china for us export has its challenges it's the the tariffs it's it's the logistics of getting vehicles from china it's the optics of having vehicles built in china and sold here but you've got to be successful in china right now in the ev business to be successful globally it's the reason why tesla went there so quickly it's the reason why gm is ramping up production there however its next car the polestar 3 will be built in ridgeville south carolina in an existing volvo plant in charleston where this poster 3 will be produced for the u.s market and not only for the u.s market they are establishing manufacturing here in the u.s in south carolina through a partnership with volvo 55 of of all vehicles are our suvs or cross over so it also makes sense for the market here and if you're going to have higher volume it'll it would make sense to build it here as well polstar partners with lg chem and catl to manufacture its batteries but there are concerns that with the rising demand for evs there will be supply constraints even with the backing of volvo it might be a little difficult in the future to make sure that they have enough cells when you've got larger automakers like general motors or even well-established ones like tesla taking a lot of the capacity depending on who their partner is charging infrastructure is a huge problem for the entire auto industry right now tesla had to build its own charging network and automakers are overall just kind of creating partnerships whether it be of electrify america chargepoint or any of the other third parties in march pollstar announced it would be teaming up with chargepoint for a more integrated charging experience for customers from a cost standpoint taking advantage of that existing infrastructure and partnering convenience wins here so make it so the consumer really doesn't have to do anything similar to evmaker's tesla rivien and lucid motors polestar is selling its cars through sleek showrooms called polestar spaces over the last 12 months or so we've built just over 45 pole star spaces by the end of this year we would have doubled the retail footprint across all of our markets service has been a challenge for other ev startups but it has an advantage since polstar is leveraging the existing volvo network and like tesla it's offering mobile service we already have a global network of very highly experienced service outlets for volvo that from day one we utilize as part of our relationship within each of the markets while early to market polstar will be competing with established players like tesla which makes up 79.4 percent of us ev sales as well as traditional automakers like gm and ford introducing their own electric offerings it's going to be a fiercely competitive market but i think they have the a position that's unique enough that they could carve their space out and they're in early enough that again they can establish themselves and as pole star looks to the future it has big plans the balance of this year is really about growing now and expanding and accelerating our presence and our volumes we have to grow that credibility with customers we're a new brand new product for many many consumers a new technology the fact that they have financial backing is a a major plus here we really don't know how a lot of these startups are going to play out and what really is going to drive a lot of this is consumer demand and for pulsar to really be successful they are going to have to establish a lot of things that many of the eb startups are fighting for as well [Music] you

Channel: CNBC

Views: 237,272

Keywords: CNBC, business, news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips, financial news, Stock market news, Elon musk tesla, tesla stock, tesla price, tesla short, tlsa, tesla short thesis, tesla quarterly earnings, elon musk net worth, elon musk on twitter, elon musk grimes, elon musk meme, elon musk genius, tesla model 3, Volvo’s Polestar, EV, electric vehicles, electric SUB

Id: aNthRZxP7Qo

Length: 12min 5sec (725 seconds)

Published: Wed Jun 30 2021