Polestar's Bold Move: Wooing Disgruntled Tesla Owners

In a strategic move to capitalize on the growing discontent among Tesla owners, Polestar Automotive PSNY has launched an enticing offer: up to $20,000 off a Polestar 3 lease for Tesla owners. This aggressive incentive, available from February 21 to February 28, 2025, is part of Polestar's broader strategy to target disappointed Tesla customers and attract them to its brand.

Polestar CEO Michael Lohscheller has been vocal about the opportunity presented by Elon Musk's political stances, which have pushed away some customers. Lohscheller believes that many people have a "very, very negative sentiment" about Musk's involvement in global politics, and he has instructed Polestar's sales executives to target these disgruntled Tesla owners.



Polestar's offer is more generous than many conquest incentives offered by other EV manufacturers. For instance, Tesla offers a $7,500 rebate for trading in a non-Tesla vehicle when purchasing a new Model S, X, or 3. Other competitors, such as Ford and Audi, provide up to $10,000 in incentives for customers switching from a non-Ford or non-Audi EV, respectively. Polestar's $20,000 offer to Tesla owners is a significant differentiator in the market.

However, it is essential to consider the potential impact of this strategy on Polestar's financial health. Offering such a substantial incentive could lead to lower profit margins for Polestar in the short term. Additionally, if Polestar is unable to maintain its production and supply chain capabilities to meet the increased demand from this offer, it could face operational challenges that may negatively impact its competitive position.

Despite these potential challenges, Polestar remains optimistic about its future. The company expects 2025 to be the strongest year in its history, with a compound annual retail sales volume growth of 30-35% for 2025 to 2027 and positive adjusted EBITDA in 2025. Polestar's strong product momentum, with the Polestar 3 and Polestar 4 representing 56% of order intake in Q4 2024, and the upcoming launch of the Polestar 5, positions the company well for future growth.

In conclusion, Polestar's offer to Tesla owners is a bold move that could help the company attract disgruntled customers and improve its competitive position in the market. However, the financial and operational implications of this aggressive incentive strategy should be carefully monitored to ensure that Polestar can maintain its long-term success. As Polestar continues to execute its sales and distribution strategy, expand its retail network, and launch new models, it remains well-positioned to capitalize on the growing demand for electric vehicles and the evolving preferences of customers.