Polestar 3 gets ready for release, with cheaper, U.S. built, tax-credit-eligible version coming
Swedish EV-maker Polestar (PSNY) is inching ever closer towards its big release of the Polestar 3 SUV.
The company kicked off its roadshow for the electric SUV with the North American debut of the Polestar 3 at an event in New York City. Suffice to say the Polestar 3 will for Polestar — backed by Volvo and China’s Geely (0175.HK) — be the biggest product release in its history, as it takes on a growing field of EV SUV competitors like the Tesla (TSLA) Model X, Mercedes (MBG.DE) EQS SUV, and BMW (BMW.DE) iX.
Polestar will begin global production of the SUV at the Volvo plant in Chengdu, China, starting in mid-2023 but then switch production for North America and other markets starting in mid-2024 out of Volvo’s plant in Ridgeville, S.C. Polestar’s other cars have been built in China, which is all part of the “asset-light” business model that Polestar is employing to build cars at existing plants owned by Volvo and Geely.
The beginning of the roadshow for the Polestar 3 accomplishes a number of things. Showing the world the next evolution of the brand, for one thing. Plus: bringing the car from image to reality for the new markets.
“It’s such an important product (in) the SUV in this premium segment,” Polestar CEO Thomas Ingenlath said in an interview with Yahoo Finance. (See video above.) “We want customers, investors to be aware of what's happening here in the next couple of months...you can’t communicate (this) through social media. The biggest thing is to come live and actually see the thing yourself with your own eyes.”
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Putting the actual car in front of actual people seems like a novel concept. Perhaps that is why Polestar is plotting out a $20 million plan to roll the car out with these roadshows, and of course traditional media, to get the word out.
Meanwhile: starting sometime next year, at the earliest, customers in the U.S. could get a huge break in the form of the IRA (Inflation Reduction Act) tax credits. While the Polestar 3 will be made in the U.S. starting next year — making it eligible for the credits — the current models, priced above the $80,000 MSRP limit for EV SUVs, are excluded from the credit.
But that's going to change.
Ingenlath said that soon after the Polestar 3 begins production in South Carolina, a cheaper, less luxurious “rear-wheel drive" version will follow that will qualify for the tax credits.
And in the meantime the Polestar 3, regardless of price and country of origin, can get access to the tax credit though a commercial lease exemption in the IRA. In this scenario any EV can get the full tax credit if it is leased through the automaker or a bank. Luxury automakers like Mercedes and Porsche have been taking advantage of this lease exemption.
All that aside, 2023 is shaping up to be a big year for Polestar, coming on top of a strong 2022 in which it met its production target for the Polestar 2 EV — and actually reported a quarterly profit back in Q3.
Ingenlath said, “2023 will be a year that is much more connected to consumer demand since, thank god, supply chain and all of that is a little less of a burden." In other words, “a little bit more of normalization in our market,” he added.
And that’s not all. The upcoming, sport-oriented Polestar 4 SUV will be making its debut later this year.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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