Geely’s Polestar has strategic moves to compete with Tesla

Geely will expand its Polestar showrooms in the mainland

Shanghai: Polestar, well known as the premium electric car model of Geely based on China is in news now. Its expansion of the total showroom network in China gains attention of the motor fans. Some sources say, Geely plans with Polestar to compete with Tesla’s locally made Model 3. Showroom strength is becoming an important differentiator for electric vehicle (EV) makers in the world’s biggest auto and EV market, as they line up new model launches.

About the strategy

Polestar, which plans to deliver Polestar 2 has currently a single showroom in Beijing, the capital of China. Polestar is expected to deliver this sedan by the end of July. Now the strategy of Polestar is to open 20 showrooms in China, to be achieved by the last quarter of this year. Polestar also plans to deliver their vehicles directly to customers, without the need of any dealers. This procedure is not new to the other electric vehicle companies like Tesla, Nio Inc and Xpeng Motors, backed by Alibaba.

Direct sales to customers can help automakers to better manage a car’s retail price and its production and inventory. However, it also adds to costs if automakers need to invest in self-owned showrooms like Tesla. Some persons associated with Polestar, who do not want to reveal their names, as the entire plan is not yet official, says that Polestar will partner with investors to build and operate the showrooms. While doing so, they will handle sales and delivery direct to customers.

Practical steps

The automaker, based in Gothenburg, Sweden, started producing Polestar 2 sedans earlier this year in China. Steps to export Polestar 2 to Europe and United States are also on progress. Polestar will open showrooms firstly in Shanghai and then expand to coastal Ningbo, northern Tianjin and southern Guangzhou. To attract a large crowd with limited outlets, the best plan they would take up will be opening these outlets in shopping malls.

In China, Tesla has over 50 showrooms. Nio currently operates around 110 showrooms, with some of the properties belonging to partners. Xpeng plans to have over 200 outlets by the end of the year from about 150 now, many of them belonging to partners. To have some description on Polestar: Polestar is an automotive brand jointly owned by Volvo Car Group and its parent company Geely. It is headquartered in Gothenburg, Sweden with production taking place in Chengdu, China.

Proposed Polestar 2 will be on the road by late 2020. Its on road cost starts from $59,900.