Volvo's Polestar 2 aimed squarely at Tesla Model 3
Model 3, meet Polestar 2.
Volvo's premium electric brand, Polestar, announced on Wednesday the first direct Tesla Model 3 fighter. The Polestar 2 compact sedan boasts a Tesla-like battery range of 275 miles and starting price of about $43,000.
Silicon Valley's Tesla has stunned automakers with the runaway sales success of its Model S, Model X and Model 3. The latter was by far the best-selling luxury car in the U.S. in 2018 with 139,783 units sold. The Polestar follows Jaguar and Audi in responding to Tesla with Model S competitors.
The Euro-luxe entries also are a response to global governments in Europe and China that are regulating the gas engine out of existence and forcing the manufacture of battery-powered cars to address fears of global warming.
The Polestar entry comes in a week in which Porsche announced it will electrify its Macan SUV.
The flood of new entries will test the market demand for battery-powered vehicles not named Tesla. According to the Inside EVs website, Model 3 sales outsold every other electric car in January by at least 5-to-1.
The Polestar is unabashedly aimed at the Model 3.
It is nearly a carbon copy to the Tesla, from its performance specs, to unlock-by-phone access, to battery range, to online ordering with a $1,000 deposit down (it will be deliverable through Volvo dealerships). And like Tesla CEO Elon Musk, Polestar CEO Thomas Ingenlath says the car will save the Earth.
“Polestar was built to support the change to sustainable mobility. This is the right way. This is the right direction to preserve this planet for future generations,” Ingenlath said at the car's introduction in Gothenburg, Sweden.
The Polestar site is open right now to order your car with a delivery date beginning in the second quarter of 2020. Compare that to Tesla, where initial orders were made in April 2016 for $1,000 down — but customers couldn't configure their cars for delivery for two years.
"The Model 3 was unusually attractive to the market because it emphasized performance — not your typical take-your-medicine green car," says auto analyst and longtime-EV watcher Anton Wahlman of financial site Seeking Alpha. "The Polestar 2 is following that model."
With reports of Tesla quality issues — and disputes over $1,000 down-payments — Volvo is poised to benefit from Tesla defectors as well as luxury customers looking for the new, new thing. But there is little evidence the EV market is poised to take off.
Sales of EVs in the US nearly doubled in 2018 — to 361,307 units, or about 2 percent of the market — but that was due almost entirely to the Model 3. Other EV vehicle sales gained just 11 percent.
"Government incentives are everything," says analyst Wahlman. "Sales fall if there are no incentives."
Indeed, Model 3 sales fell off a cliff in January — from 25,250 in December to an estimated 6,500 according to Inside EVs (Tesla does not publish official numbers) — after Tesla's federal tax credit was cut in half from $7,500 due to hitting the law's cap of 200,000 vehicle sales.
EV sales in other countries have also proven stubbornly low without incentives. Only in Norway, where EV adoption is about 55 percent of sales according to Wahlman, have EVs become a thing. That's because — in its effort to eliminate the gas engine — Norway has spared EVs like the Model 3 the whopping 100 percent excise tax and 25 percent value-added tax on gas-powered vehicles.
But with governments from France to Germany banning gas cars from cities over the next decade, every automaker is investing in EVs.
Tesla's failure to deliver on its promise of a $35,000 EV does not seem to have driven customers to other models. GM's $37,000 Chevy Bolt EV, for example, saw sales dip from 1,177 in January 2018 to 925 in January this year.
Even mid-size Model S competitors like the sleek new Jaguar I-Pace EV put up small numbers in January, selling 201 units versus the 875 of the Model S.
Volvo hopes to buck that trend with its stylish new Polestar 2. In addition to its copycat Model 3 specs, it is the first car to feature Google's Android-based infotainment system. And it comes with signature Volvo style points like Thor's hammer headlights and a vertical touchscreen.
"Branding is a huge hurdle," says Wahlman about Volvo's decision to sell its EVs under the name Polestar. "Maybe they should have kept the Volvo name. And within a few months we're going to get the Tesla Model Y crossover as the hot new thing."
Henry Payne is auto critic for The Detroit News. Find him at firstname.lastname@example.org or Twitter @HenryEPayne. Catch “Car Radio with Henry Payne” from noon-2 p.m. Saturdays on 910 AM Superstation.