Sunday, 2024 June 16

Polestar’s Thomas Ingenlath on the company’s next moves and reasons for not keeping R&D in-house

Emerging players in the electric vehicle sector often invest heavily in developing smart driving and intelligent cabins to create experiential differences and gain a technological edge. Polestar, however, stands as an exception.

“Developing autonomous driving entirely on our own might lead to issues in resource allocation or miss out on some other potential opportunities,” said Thomas Ingenlath, CEO of Polestar, in a recent interview with 36Kr and other media outlets. “We might not be able to use sustainable, environmentally friendly materials,” Ingenlath added.

Polestar, a joint venture of Geely and Volvo based in Gothenburg, Sweden, went public on Nasdaq in June 2022. Positioned as one of Geely’s independent entities, Polestar primarily targets the global high-end pure EV market, aiming to develop a brand image reminiscent of Porsche.

Backed by Volvo, Polestar’s product design reflects a strong Nordic influence, emphasizing driving performance and the usage of lightweight, eco-friendly materials to shape a luxury brand image with a focus on design.

However, Polestar currently only has one mass-produced electric sports sedan, the Polestar 2, with a cumulative sales figure of 41,800 units in the first three quarters of this year. In China’s rapidly growing EV market, Polestar has struggled to gain significant market share.

In early November, Polestar, still lacking financial self-sufficiency, secured a new round of funding amounting to USD 450 million from Geely and Volvo.

Presently, Polestar urgently needs a more robust product portfolio to establish a firm footing. During the recent Polestar Day event in Los Angeles, the company showcased its entire current and future lineup:

  • In addition to the Polestar 2, two pure electric SUVs—Polestar 3 and Polestar 4—are scheduled for deliveries in the second quarter of next year and the end of this year, respectively. There are also concept cars and their corresponding production versions: four-door coupe Polestar Precept (Polestar 5) and pure electric coupe Polestar Synergy (Polestar 6), both slated for release in 2025 and 2026.
  • Driving performance remains Polestar’s intended luxury differentiator. Polestar’s first self-developed vehicle architecture is a custom-bonded aluminum platform. Concept cars like Precept and Synergy, along with production models Polestar 5 and Polestar 6, will feature a bespoke, bonded aluminum platform to ensure superlative performance when combined with in-house high-performance electric motors.
  • The shift to electric vehicles and the subsequent architectural revolution have made intelligence an unavoidable global automotive trend, especially for high-end brands like Polestar. Polestar 3, set to begin production early next year, will feature Google’s latest high-definition maps. It also offers an optional version equipped with Luminar’s light detection and ranging (LiDAR) capabilities to support advanced driver assistance systems (ADAS).
  • Polestar 4 will adopt Mobileye’s SuperVision ADAS. In subsequent facelift models, it will integrate Luminar’s LiDAR and incorporate Chauffeur, Mobileye’s next-generation autonomous driving technology. Chauffeur can ostensibly achieve Level 4 autonomous driving on highways and advanced navigation assistance on other roads.
On November 9, 2023, Polestar hosted its inaugural Polestar Day event in Los Angeles, California, presenting its latest projects, collaborations, and prototypes to an audience of customers, investors, and media. Photo courtesy of Polestar.

Autonomous driving is a crucial aspect of vehicle intelligence. While companies like Tesla and Huawei have invested heavily in developing autonomous driving, Polestar takes a different approach: collaborating with suppliers to integrate autonomous driving solutions.

“In fact, our goals align with those companies dedicated to researching this technology,” Ingenlath said. Collaborating with top companies in the industry provides Polestar with the opportunity to stand at the pinnacle of the pyramid. In contrast, a complete in-house approach could impact the company’s diversification in other areas, such as the potential inability to use sustainable, environmentally friendly materials.

In addition, being a global company, Polestar considers the localization of technology in different markets. According to Ingenlath, the evaluation of R&D capabilities is also subject to regional limitations. For example, Tesla’s autopilot performance in the US is superior to other markets. Therefore, Polestar chooses to collaborate with suppliers to cover a broader range.

In the realm of intelligent cabins, Polestar adopts a similar strategy. Collaborating with partners like Google, Polestar co-develops cabin systems. A new feature in the updated Polestar 2 allows users to engage in remote conversations with the Google Assistant, enabling remote activation of preset air conditioning, battery status checks, and unlocking doors.

However, intelligent cabin experiences, including remote vehicle activation, and advanced driver assistance functions constructed with high-precision maps and LiDAR, are not groundbreaking in the Chinese automotive market. Newer players like Xpeng Motors have already incorporated these features in vehicles priced at around RMB 200,000 (USD 28,200), not to mention higher-priced models.

“The pace of innovation in China far exceeds our imagination, and no other market can compete with it. Chinese customers have more extreme pursuits in terms of a completely new vehicle experience and digital integration technology,” Ingenlath said.

Therefore, Polestar is exploring different product development and market operation strategies in the Chinese market.

In June this year, Polestar announced a collaboration with Xingji Meizu, a company under Chinese entrepreneur Li Shufu. The joint venture is aimed at integrating Polestar’s and Geely’s capabilities in vehicle development and Xingji Meizu’s product and software systems to enhance their competitiveness in the Chinese market.

Polestar 3 and Polestar 4, both pure electric SUVs, share similarities, but Polestar 4 is developed based on Geely’s sustainable experience architecture (SEA) platform. Aside from body design and chassis tuning, the Chinese team is responsible for all other aspects. This model will be the first to be delivered in the Chinese market.

With the support of Xingji Meizu, Polestar 4 vehicles sold in China will be equipped with Polestar OS, a Polestar-exclusive operating system. This system adapts Xingji Meizu’s Flyme Auto platform and will provide a unique experience similar to Flyme Auto, such as seamless connectivity between phones and car infotainment systems, sharing software ecosystems, and even cross-device access to in-car hardware like cameras.

To achieve this, Xingji Meizu and Polestar are jointly developing the Polestar Phone and plan to launch more smart devices in the future, aiming to create a seamless connected user experience.

Beyond product development, Polestar has implemented differentiated strategies in production, sales channel construction, and other aspects. For example, Polestar models are not only produced in China but also in factories in South Korea and the US.

Leveraging the support of Geely and Volvo, Polestar collaborates with group subsidiaries instead of establishing its own factories. According to the company, Polestar 4 will be produced first at Geely’s Ningbo factory and will start production in South Korea (a joint venture between Renault, Geely, and Samsung) by mid-2025. Polestar 3 will also be produced in China and will start production at Volvo’s factory in Ridgeville, South Carolina, in mid-2024.

The Polestar Design Contest, an annual event organized by the company, exemplifies its focus on design. During the recent IAA Mobility auto show in Germany, Polestar showcased the Polestar Synergy, an electric supercar that combines three winning designs from last year’s edition of the contest. Photo of the Polestar Synergy, courtesy of Polestar.

The following excerpts are from the interview with Ingenlath and have been edited and consolidated for brevity and clarity.

36Kr (KR): As a globally oriented company, how do you adjust to the differences in demand between different markets?

Thomas Ingenlath (TI): Some of the traits we possess serve as entry points for Polestar into different markets. This includes making design a brand-driving force because people’s pursuit of aesthetics is universal worldwide.

But design alone is not enough. We also need to follow the trends of intelligence and digitization as new guiding principles. The most significant differences emerge in specific business models and how we interact with customers when entering different countries and markets. This is particularly evident in our market strategy in the US and Europe, including the dealership sales model in the US.

KR: Polestar’s after-sales service relies on Volvo, which can reduce labor costs. Will there be plans to establish a more independent service system in the future?

TI: With the establishment of the joint venture with Xingji Meizu, we will create a service system tailored for the Chinese market. This includes more complete infrastructure and more service points to provide users with more localized services.

KR: Many Chinese companies emphasize independent R&D, but Polestar chooses to collaborate with different companies in various fields. What are the advantages and disadvantages of this model? Do you worry that outsiders might perceive Polestar as weak in technological innovation?

TI: Partnering with the best in a particular industry gives us the opportunity to stand at the top of the pyramid.

For example, we haven’t fully developed autonomous driving technology on our own. In fact, our goals align with those companies dedicated to researching this technology. But if we were to do it entirely on our own, it might lead to problems with resource allocation and even mean missing out on other potential opportunities, such as not being able to use sustainable, environmentally friendly materials.

What we aim to do is integrate the industry’s best solutions, such as collaborating with a company in a specific country or market to empower us in high-level intelligent assisted driving. In essence, the evaluation of R&D capabilities is also subject to regional limitations. For example, Tesla’s autopilot technology has received high recognition in the US but might not perform as well in other markets like Germany and China.

KR: Setting aside your role as the Polestar CEO, what aspect of Polestar do you believe would appeal to Chinese customers?

TI: Consumers don’t make purchasing decisions based on a single trait, whether it’s acceleration, range, or even seat massage functionality.

For example, when you buy a Prada backpack, you don’t consider how much it can carry or if it’s comfortable to wear. You buy it because the brand gives you a sense of identity. The same applies to cars. These intangible qualities won’t necessarily make you appreciate a brand, but quality is crucial, and quality goes beyond the product itself.

For a brand, creating that sense of identity is essential. Polestar’s focus is on pursuing sustainable development. All our designs and material choices aim to make people feel that Polestar is a brand with character and taste.

KR: Will the Polestar Phone be introduced globally? Polestar 3 and Polestar 4 feature cabins developed by Volvo and Xingji Meizu. Will Star Xingji Meizu’s software engineering and consumer electronics capabilities see more applications in Polestar’s global product lineup?

TI: Although some software and accessories in Polestar 3 and Polestar 4 come from both companies, Xingji Meizu and Volvo are ultimately part of Geely. Therefore, our overall direction in future technology development is unified.

The Polestar Phone will be launched first in the Chinese market. When the concept of a phone was first proposed, I must admit I found it somewhat surprising. But during the development process, many European colleagues were curious, and they hope to use the phone in Europe in the future. That’s part of our plan. But for now, we want to focus on doing well in the Chinese market.

This article was written in Chinese by Peng Suping and published by 36Kr.com

36Kr Global Writers
36Kr Global Writers
The tech ecosystem is roaring. Unicorns valued at billions of dollars have emerged worldwide, while venture capital and strategic investors are constantly on the lookout for the next big thing. 36Kr Global is committed to establishing ties between global stakeholders and providing the most vital information about China’s tech scene and capital markets.
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