Polestar ‘on track to deliver 50,000 cars this year,’ CEO says
Polestar CEO Thomas Ingenlath joins Yahoo Finance Live to discuss the Polestar 3 SUV, U.S. electric vehicles and buyer preferences, manufacturing in the U.S. and China, and the outlook for the company.
BRIAN SOZZI: A prime position for Polestar. The Swedish automaker backed by Chinese conglomerate Geely, debuting the Polestar 3 electric SUV, as it expands its model line. Investors in the company recently cheered by a reported net profit last quarter. But can Polestar keep the good times rolling as global supply chain headwinds, battery worries, and currencies take a bite?
Joining us with more Thomas Ingenlath, Polestar's CEO and our very own auto correspondent-- senior auto correspondent, I should say, Pras Subramanian. Good to see you both. Thomas, just take us through this quarter. What's your message and takeaways for investors?
THOMAS INGENLATH: Strong quarter. Main message for me is, we are on track to deliver 50,000 cars this year. So the cars, are produced They're on the way to the customers. And we are cruising to the end of the year, delivering these cars, having that happy end.
PRAS SUBRAMANIAN: So Thomas, you know, 50,000 cars is a big deal in one year. And how do you think you guys are able to do that? You know, given the fact that other of your rivals have been having problems scaling up right now, and you guys are able to actually cut operating costs, too.
THOMAS INGENLATH: Well, we always said and now that is becoming a reality. Of course, being a startup that is backed up by Volvo makes a difference. We can work with very experienced production. We can work with very, very established and experienced logistics help us, for example, now to get these cars in a couple of weeks delivering 20,000 cars. I mean, who could do that if you would not have that backbone?
JULIE HYMAN: And who are the main customers? Who-- as you learn more, as you make more deliveries, as you sell more cars, what kind of picture is emerging over who is buying them?
THOMAS INGENLATH: It's exactly that mix of, on one hand, people who are very experienced with EVs. They might have had three, four Teslas already. They know everything about charging and how that works. They are very keen on experience. Just simply that much of a different product from what they are used to.
And then big times us having to explain to make people familiar with what does it mean to drive an electric car. People come into the Polestar spaces, yes, partly they want to get to know the product, but big times them wanting to hear from the staff there, what does it mean to own an electric car? What effect would it have on my day-to-day life?
PRAS SUBRAMANIAN: So the Polestar 3, the SUV on track, I think, very kind of a model that people are looking at as a potential big seller for you guys. Is that how you feel about that? Will that be your top volume seller, do you think?
THOMAS INGENLATH: Especially here for the US. Obviously, the size of the car, the luxurious premium interior, and how much space it offers. Now, we're very much looking forward to have this car here. '23 will be the year when this comes off course, as well. It means such a milestone for us to go in production here in the US, having Charleston, the factory, taking the production of the Polestar 3 on. That's a big thing for us.
BRIAN SOZZI: Thomas, there's a lot of-- there's a big debate in the auto industry on how much labor will be needed to make electric cars. Talk to us through your production process. Is it really true they just need less people to build these cars?
THOMAS INGENLATH: No, that would be now I think putting the emphasis wrong. Yes, the drive train, of course, has less components. That's definitely something that's taking complexity out. Having said that, the battery system is a big thing. And you need definitely as well, A, not only the know how, but of course, the assembly of the battery pack.
So all in all, that production, complexity, and actually know how that you need to produce a car in a good quality assured way, has rather increased. And of course, software and dealing with software is the big thing.
BRIAN SOZZI: It's just a changing of jobs. You still need the people, they just need different skills.
THOMAS INGENLATH: Absolutely.
PRAS SUBRAMANIAN: So you talk about production and building in the US, how big a part of the IRA was that for your decision to do? You were-- I think you were already planning to make and building in the US to begin with, right?
THOMAS INGENLATH: Yeah, I mean, that's-- we are fast and responding fast, but we are not that fast that we could switch quickly production because of that. No, that had been a decision, I would say, for different reasons because, obviously, producing much closer to where your market is an advantage from environmental reasons, by as well from speed, how quickly you can actually get the car out.
The decision point and why we made that decision was a big change here in the US because, let's face it, 2017, when we were first time here launching the brand, there was definitely not that big wave of electrification in the US that you could feel like, oh, yeah, we have to be here and it will be such a strong market.
Changed totally over the course of '18 and '19. And then clearly we saw in '19 that we have to accelerate and make US much more of a bigger topic for us as a company.
JULIE HYMAN: So when should the first Polestar in the US be manufactured?
THOMAS INGENLATH: '24, we will have it made.
JULIE HYMAN: And you're on target for that?
THOMAS INGENLATH: Oh, absolutely, yeah.
JULIE HYMAN: OK.
BRIAN SOZZI: Wow. Interesting story to follow. I have drive-- reviewed one of your cars. I think they're pretty cool. Definitely cool indeed. Polestar CEO Thomas Ingenlath, good to see you. Good to see you as well, Pras Subramanian.