Weekly Brief: Polestar Targets Mass Sales with its First SUV

Commentary By Andrew Tolve

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17th October 2022

Polestar unveiled the new all-electric Polestar 3, the company’s first SUV and best chance yet to achieve global mainstream success.

Polestar is one of the many EV start-ups that went public through a reverse merger with a special purpose acquisition company (SPAC) during the pandemic. While many of those start-ups have subsequently faltered, Polestar has kept its head above water, thanks in large part to the fact that it can lean on the established carmakers like Volvo and Geely as its two biggest shareholders. The start-up has lost more than 50% of its stock value since going public, however, and is eager to start competing with the likes of Tesla on the global stage, which is where the Polestar 3 comes in.

The new crossover SUV comes standard with a 489-horsepower engine, an estimated range of 300 miles per charge, a luxurious interior and arguably the most advanced technology on the market today in the consumer segment. The vehicle features five radar modules, five external cameras, twelve external ultrasonic sensors and a Nvidia Drive core computing platform that serves as the vehicle’s “AI brain,” harnessing data from all the different cameras and sensors to run a suite of advanced driver-assistance safety features. Beyond basic lane centering and automatic braking, the Polestar 3 can purportedly adjust its speed and position when navigating sharp turns and tricky traffic environments.

The vehicle harnesses high-def maps to anticipate what’s coming down the road. It makes real-time adjustments and, according to Polestar and its technology partners, gets smarter with every mile that it drives. “Millisecond by millisecond, information is collected, analyzed, and turned into action by the car,” said Ödgärd Andersson, the CEO at Zenseact, Volvo’s advanced driver assistance spinoff.

The Polestar 3 starts at $83,900 and will enter production in late 2023 in China. The first tranche of vehicles will head to market in China and Europe, where Polestar has already found traction and is on pace to sell about 40,000 EVs this year. The US market is a different story. Polestar barely has a foothold in America, where it’s on pace to sell fewer than 10,000 EVs in 2022. It’s hoping the crossover SUV appeal of the Polestar 3 can change that. The vehicle will go into production in the US at a Volvo factory in South Carolina starting in mid-2024.

In other news last week, Volkswagen announced that it will invest $2.3Bn into a new joint venture between its software company CARIAD and Horizon Robotics, one of the leading providers of computing solutions for smart vehicles in China. The joint venture will focus on developing ADAS and autonomous driving systems, which ultimately will find their way into VW’s growing lineup of EVs in the Chinese market. VW will own 60% of the JV, Horizon Robotics 40%.

Finally, Honda and Sony revealed more details about their plans to bring an EV to market in the US through their new joint venture, Sony Honda Mobility. The two say the first EVs will hit dealership lots in the US in spring 2026, with pre-orders commencing in 2025. Sony Honda EVs will go on sale in Japan in late 2026. Semi-autonomous driving will feature heavily in the vehicle. Sony Honda Mobility is aiming for Level 3 automation, which means that drivers can hand over control to the vehicle and engage in secondary activities like watching a movie, for instance, so long as they are ready to resume driving when prompted.