Polestar Reveals Three-Year Business Plan, Will Turn Profit In 2025

Polestar has had an interesting past. Founded in 1996 to build entrants in the Swedish Touring Car Championship, Polestar eventually became Volvo’s official performance partner in 2011. Volvo Cars, itself owned by the Chinese company Geely, fully acquired Polestar in 2015, spinning it off into its own brand that builds EVs and plug-in hybrids using existing Volvo platforms and powertrains.

Polestar’s position as a former motorsports company turned tuning house doesn’t really jive with its current product lineup, though. As nice as the Polestar 1 grand touring coupe and Polestar 2 five-door crossover are, they don’t exactly tango with racing cars in terms of driving excitement. Adding to the young brand’s identity crisis, Volvo announced that its entire lineup would be free of internal combustion by 2030. What’s the point of an electrified car wearing relatively unknown branding, especially if its much more established corporate partner is also planning on a lineup consisting only of EVs?

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Back To Its Roots

Polestar seems to have anticipated that question because the company just revealed a three-year plan that involves new power, bespoke product architecture, and greater differentiation from Volvo. The EV manufacturer doesn’t mince words – Porsche is in Polestar’s sights as it seeks to enhance its high-performance reputation. Along with that emphasis on driving enjoyment, Polestar also expects to break even, financially speaking, in 2023, with its first profits arriving in 2025.

Engineering is part and parcel of those goals. John Paolo Canton, Polestar’s head of public relations and communications in the Americas, confirmed the automaker was developing a new aluminum space frame chassis that wouldn’t be shared with Volvo. This lightweight architecture will also be capable of Level III driver assistance, allowing for unsupervised highway driving in certain conditions – the company credits its partnership with Luminar and its long-range lidar technology in that respect.

Likely to remain a Polestar exclusive is a new motor, codenamed P10. Designed in-house, the P10 EV motor is capable of producing 603 horsepower (450 kilowatts) on its own, about 50 percent more than the most powerful electric mill Porsche makes. Like the Porsche Taycan, the motor will also incorporate a two-speed transmission, and a size of 14 by 21 by 25 inches (36 by 50 by 64 centimeters) will allow it to scale to a variety of automobile form factors.

Given its history of building championship-winning touring cars, Polestar has a credible claim on Zuffenhausen-level performance. But if that isn’t enough to convince the buying public, Canton also acknowledged the weight-conscious handling wizardry of one of Polestar’s other corporate partners: Lotus, the English sports car manufacturer owned by Geely. While Canton stopped short of saying Lotus was involved in the development of future Polestar autos (even though it too will go all-electric), he did suggest that each brand would contribute its own best practices and know-how to the Geely ecosystem.

What will be shared among Geely brands is a new battery design that is compatible with 400-volt and 800-volt infrastructures. Polestar claims the battery can hit an 80-percent charge in about 20 minutes thanks to a maximum charging speed of 103 kilowatts. The electrical architecture will also enable bi-directional charging, allowing the car to keep a home powered up in the event of a power grid failure or severe weather.

Although the automaker wouldn’t commit to timing for the arrival of the new battery, Polestar’s bespoke space frame platform and P10 motor are expected to show up on a forthcoming fastback sedan inspired by the Precept concept. Called Polestar 5 and pictured above, the sleek five-door will reportedly rival the Porsche Taycan in terms of performance, design, and innovation, if Head of Polestar USA Gregor Hembrough is to be believed. And to be honest, he’s probably right, especially if Lotus is indeed passing notes to Polestar in class.

Near-Term Growth

Until the 5 arrives sometime in 2024, Polestar will likely continue to make use of its parent company’s architectures. That doesn’t mean it will be resting on Volvo’s laurels, though. Polestar’s next debut will be an SUV based on the large Scalable Product Architecture (SPA) chassis found under the XC90, but it will reportedly be tuned to feel more performance-oriented instead. The automaker specifically called out the Porsche Cayenne as a potential rival to its midsize, five-seat Polestar 3 offering, which we’ve already seen in camouflaged form (as well as rendered by digitally removing the disguise).

The due-in-2022 Polestar 3 certainly looks sportier and more aggressive than its XC90 cousin. A fastback roofline and two rows of seats distinguish it from the more traditional Volvo, and reports suggest it will be faster as well, courtesy of either retuned versions of the parent company’s electric motors or the aforementioned P10 units. Available in either a single- or dual-motor configuration, the flagship layout will be more powerful than any Volvo SUV. That means we can expect more than the 402 horsepower and 486 pound-feet (300 kilowatts and 659 newton-meters) on offer from the likewise-electric C40 Recharge fastback crossover.

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Following its larger sibling will be a Porsche Macan–sized Polestar 4 small SUV, which should arrive in 2023. The automaker’s representatives were mum on details and wouldn’t relent when pressed, but the silence spoke (or at least inferred) volumes. Since Polestar wasn’t ready to divulge specifications or architecture details, we think the company might be cooking up something a bit more unique than an EV based on the XC60’s mid-sized SPA platform. The Polestar 4 may use parent company Geely’s Sustainable Electric Architecture (SEA), with power that should slightly eclipse the XC40 Recharge.

The 2023 Polestar 3 will likely have a starting price of about $80,000, while the 2024 Polestar 4 should be quite a bit cheaper at about $50,000, according to CEO Thomas Ingenlath. Both crossovers will help the brand achieve even more growth among premium EVs, especially as consumers continue to prefer high-riding vehicles. Alongside the standard-bearing Polestar 5 fastback sedan and today’s Polestar 2, the Polestar 3 and 4 will help the automaker sell 290,000 units worldwide in the 2025 calendar year – a huge improvement from 2021’s projected sales of 29,000.

Dollars And Cents

Alongside that greater market penetration will be improved financial prospects, according to Polestar. As part of its aforementioned plan to break even in 2023 and turn a profit in 2025, the automaker will go public thanks to a proposed business agreement with Gores Guggenheim Inc., a special purpose acquisition company (SPAC) that will give Polestar a spot on the NASDAQ ticker.

The SPAC will partner with Polestar, with the EV manufacturer’s existing investors receiving a majority stake in the company and Gores Guggenheim’s public and private investors getting a piece of the pie as well. Polestar is expected to trade under the symbol PSNY once the details of the partnership finalize sometime in the first half of 2022, at which point the public should be able to buy shares of the automaker’s stock. Polestar expects a market valuation of $20 billion when that all goes down.

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Though small-to-middling among other automakers, that number is still distantly removed from the company’s cottage-industry roots in Swedish racing. But in spite of its modern trappings (and American investment dollars), Polestar is keen to maintain its Scandinavian heritage in design, performance, and environmental sensibility.

Armed with Volvo’s logistics and retail know-how, Geely’s wide engineering portfolio that includes the geniuses at Lotus, and a healthy dose of capital, Polestar is itching to take on the premium-EV space. As much as we like the gorgeous Polestar 1 and practical Polestar 2, we’re excited to go Taycan- and Tesla-hunting with the brand’s compass rose badge leading the way.