Polestar Space Co-building to Share Financial Pressure
Compared to the traditional distribution model, similar to current new car-making forces such as Tesla, Polestar will adopt an online direct sales method to achieve price unification and jointly build Polestar Space with its strategic partners offline.
Similar to TESLA’s flagship store and NIO’s Niuwu, Polestar Space will also be located in high-end urban business circles. However, unlike the others, Polestar Space is jointly built by Polestar and its strategic partners. The reason is that if Polestar invests all its 20 spaces, the pressure on Polestar will be immense.
Gao Xiang did some calculations. If all of Polestar’s 20 Spaces are invested solely by the factory, then according to the initial investment of 3 million yuan for one store, operating cost of 6 million yuan and cash flow of 8 million yuan, this investment will be a great burden for Polestar. Working with strategic partners can ease the financial pressure.
On the other hand, if Polestar develops customer resources on its own, the cost will be very high. Now it is expensive to acquire a sales lead. Through cooperation with strategic partners, they can bring their high-quality customers to Polestar.
As of today, 11 dealer groups have signed strategic investment agreements with Polestar, committing to the construction of 17 Polestar Spaces. In addition, 8 dealer groups have also applied and are in the Polestar auditing process.
Among the first batch of signed Polestar strategic partners, there are dealers of Volvo, Mercedes-Benz, BMW, Porsche, Bentley and other luxury car brands.
From an investment point of view, the standard area of Polestar Space is about 250 square meters, and the initial fixed investment will not exceed 3 million yuan. According to Polestar’s calculations, the operating cost of Polestar Space, including rent and personnel, will not exceed 6 million yuan per year.
As a comparison, the area of a traditional luxury brand 4S store is generally around 2,000 square meters, with an initial investment of at least 20 million yuan, operating costs of over 10 million yuan per year, and at least 40 million yuan in liquid funds.Regarding after-sales service, Gao Xiang said that Volvo’s dealerships are carefully selected because Volvo has a very good reputation for after-sales service, and its professionalism has been recognized by users. In addition, its network layout is already very extensive, with a total of 45 dealerships signed up as Polestar service providers.
In terms of service packages, Gao Xiang said that some service packages can be enjoyed by customers for a lifetime, such as home charging piles. According to Polestar’s plan, it will continue to provide free home charging pile installation services to customers.
Secondly, the data package is free for three years, and currently the Polestar App is updated on average once a week.
In terms of product planning, the large pure electric SUV Polestar 3 has been confirmed for production, and the production of Precept is already in the plan. In addition, Polestar will gradually launch more abundant Polestar 2 products next year.
In response to questions from the media about how Polestar will respond to the expected large price reduction of Tesla Model 3 with complete localization in China, Gao Xiang said that Polestar’s target market is also the high-end luxury electric vehicle market. The continuous reduction in Tesla product prices has gone far from my market positioning. Polestar insists on competing in the luxury electric vehicle market with high-value, high-tech, and high-performance products, rather than price competition.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.