Volvo-Geely Polestar Brand to Build Next Electric SUV in U.S.
(Bloomberg) -- Polestar, the electric-car maker controlled by Volvo Car AB and its owner, Zhejiang Geely Holding Group Co., will produce its new Polestar 3 SUV at Volvo’s U.S. plant in South Carolina.
The plug-in crossover, which comes after the Polestar 2 fastback took aim at the Tesla Model 3 late last year, will start production in early 2023, the company said. It will be built on the same line as Volvo’s new XC90 SUV, and share a dedicated electric platform that also enables advanced autonomous features, Polestar Chief Executive Officer Thomas Ingenlath said in an interview.
Created as a pure-electric performance brand in 2017, Polestar is betting it can leverage the manufacturing footprint of its Swedish and Chinese parents to compete in the fast-growing electric-vehicle market. It announced more than $550 million in funding from outside investors in April, and it’s exploring options for going public as soon as this year at a valuation of more than $10 billion, Bloomberg News reported in March. Volvo also is mulling a potential IPO later in 2021.
“Polestar’s business model is heavily supported” by its ability to use existing manufacturing infrastructure, “and now we finally have that proof point,” Ingenlath said. “Fairly early in our history, with our second product, we already come to the U.S. and produce in the U.S.”
Volvo is investing $118 million to prepare its factory outside Charleston to build the Polestar 3 -- Polestar is paying its parent per car to cover costs like tooling and labor.
Volvo opened the factory in Ridgeville, South Carolina, in 2018 with ambitious plans to export cars to China and showcase its re-emergence as a global brand. The U.S.-China trade war foiled those export plans, and the coronavirus further challenged the plant with parts shortages. The factory employs nearly 1,500 people and has capacity to produce 150,000 units a year, which will accommodate Volvo’s S60 sedan and XC90 SUV along with the Polestar 3.
Polestar hasn’t disclosed exact sales figures, but deliveries of the Polestar 2, which went on sale in the U.S. in late 2020, are “in the thousands” there and “tens of thousands” worldwide, a spokesman said.
At $59,900, the fully loaded Polestar 2 has had to contend with a 27% tax in the U.S. because it’s produced at a Geely plant in Luqiao, China -- a base model around $45,000 will arrive this fall. Pricing for the Polestar 3 hasn’t been disclosed, though it will likely cost more because it’s larger and more luxurious.
Avoiding U.S.-China trade tariffs is one motivation to build the Polestar 3 in South Carolina, Ingenlath said.
Another is being closer to customers, and avoiding the carbon emissions that come with importing cars across the globe, he said. Polestar plans to open 25 new retail outlets in the U.S. in 2021, and is targeting not just Tesla customers, but also buyers of BMW, Mercedes and Audi brand cars, said Ingenlath, a former head of design for Volvo Car.
“We have a product portfolio ahead of us that will contain many more products than just Polestar 2 and 3,” he said. “That is where we of course need funding to develop these cars.”
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