Polestar 2: Competing on Tesla’s Terms

When people think Tesla they think Electric Cars. Some think of a company teetering on bankruptcy and others think the savior of humanity. The truth is Tesla is upsetting the established car industry, and this isn’t only because they sell EVs.

Tesla has a unique (in the industry) setup of not using franchised dealers and instead has boutiques where you see the product and place the order. You don’t haggle with them. If you like what you see, you buy it for the price advertised. If you don’t like the price, you move on.

Car companies have tried new sales techniques in the past, notably Saturn starting in 1990. They introduced a concept of no haggle pricing, but the issue was you had a car that wasn’t very fashionable and didn’t disguise the fact that you were still dealing with a fairly standard franchised car dealer.

What it takes is a totally new mindset and a fashionable new product. If legacy car makers want to compete in this new automotive world, they are going to have to rethink how they sell cars. Which brings us back to Polestar.

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They are taking the boutique approach like Tesla, and will open small retail stores in areas where people congregate and shop to get a lot of foot traffic and show off their products. You can talk to the sales person in the shop and checkout the car to make sure it fits properly.

Stores won’t hold inventory, and instead you order online or in the shop when you are ready to buy. The difference with Tesla is they will still be operated by select franchised Volvo dealers, but differ from Saturn in that they won’t be setup like a car dealer.

What do you think? Do you think Polestar can compete in the new Tesla defined market space? Comment below.