Polestar set to expand China showroom to compete with Tesla

Polestar, the premium electric vehicle subsidiary of Volvo, is planning a large expansion to its showroom network in China, sources close to the company have said.

This is preparation for the delivery of cars to compete with Tesla’s locally-made Model 3.

Showroom strength is becoming an important factor in the differentiation of electric-car makers in the world’s biggest EV market as they line up new model launches.

This is ahead of the automaker’s plans to deliver their new model, the Polestar 2 electric Sedans in China, starting in July. The model currently only has one showroom from the model, located in the nation’s capital, Beijing.

The sales will also be made directly to customers by Polestar instead of them going through third-party dealers, aligning with trends used by other EV producers, such as Tesla, Nio and Xpeng Motors. These sales will be backed by Alibaba.

Direct sales to customers can help automakers better manage a car’s retail price and its production and inventory. However, it does add costs to production due to the requirement of self-owned showrooms.

Despite this, Polestar will partner with investors to build and operate the showrooms while managing sales and deliveries of cars, said the sources, who wished to remain anonymous on this occasion due to the plan not being public.

The automaker, based in Gothenburg, Sweden, started producing the Polestar 2 sedans earlier this year in China and will also export them to Europe and the US.

The price tag of the new EV is listed at $59,900 (€53,500) – squarely between the Tesla Model 3 and Model S. This is roughly $2,000 (€1,786) cheaper than the original projected values.

It is also to be the first vehicle to utilise Google’s Android platform for its infotainment system.

It will open showrooms firstly in Shanghai and then expand to coastal Ningbo, northern Tianjin and southern Guangzhou. The showrooms are to be primarily based within shopping centres.

Other companies have significantly more leverage over Polestar due to having access to far more showrooms. Tesla currently 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, up from their current 150 in operation. 

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