EV Maker Polestar Hoping That Microleases Leads To Long Term Sales Boost For Their Model 3
In an effort to ensure a successful launch of their new electric SUV, Polestar is granting their customers extraordinary flexibility
The automotive landscape is littered with an ever-growing number of Electric Vehicle (EV) options for consumers to choose from. As more companies have jumped into the market, the number of different autos that don’t rely on gas have increased exponentially. Such competition makes it hard for manufacturers to build a customer base, making effective strategies to attract and keep drivers the name of the game. Polestar (PSNY) is hoping that microleasing, one of their more recent initiatives, will give them a leg up in making the upcoming release of their Polestar 3 a smashing success.
While many EV manufacturers are all about the bells and whistles, Polestar has focused more on being accessible and reasonable, while incorporating high-end design and technology. Their website describes the company as such:
“Polestar cars are a new form of electric performance. One defined by minimalistic design, technological innovations, sustainable solutions, and a complete lack of compromise.”
After having released a number of models over the past years, the newest model about to fully hit the roads is the Polestar 3 in early 2024 (a limited number of these vehicles have already come out). An electric SUV with up to 300 miles of range and 30-minute charging time, it’s expected price tag is starting at $83,900 and then going up depending on add-ons.
Obviously, making such a large purchase is a big decision and will require customers being sure that the vehicle is what they want. That’s why Polestar is hoping that their microleasing program will help drive satisfied buyers to their new model.
The Los Angeles Times’ Kyle Stock recently reported on the new program that Polestar hopes that by giving drivers increased flexibility will in turn buy them more loyalty and curiosity.
Started this past October, the Polestar flexible lease program allows customers to lease a Polestar 2 for a term as short as five months. The hope is that many of these 24-month leases that end early will be because the drivers have been impressed with their Polestar experience that they choose to upgrade to the 3.
Polestar USA’s chief executive, Gregor Hembrough, explained the thinking that went into his company’s new initiative:
“Let’s put it this way: It’s an extended test drive. With a lot of customers, their leases are expiring and every one of our rivals have something for them to go into, so we had to step up to the plate.”
Other EV companies are also offering more open leasing options, along with other incentives to attract buyers. It’s a dog-eat-dog world, and Polestar is leaving no rock unturned in their efforts to have a successful launch of their new vehicle.
Through the first three quarters of 2023, Polestar sold/delivered approximately 41,700 vehicles, an increase of 37% over 2022. Those are some pretty serious numbers in the EV world, so maintaining and building off their impressive sales is a must.
Regardless, 2023 was a difficult year for Polestar investors. After the company cut back on sales/delivery projections, the stock price tumbled from a 12-month high of $6.59 to briefly below $2.00. It currently sits at $2.22, but not everyone has given up on it. According to TipRanks, the stock is a “Moderate Buy,” as two analysts believe it is a “Buy” and a third has it as a “Sell.” However, their cumulative 12-month price prediction average of $4.67 gives it more than 100% to move to the upside if everything goes according to their expectations.
When companies have to deal with a lot of competition, it usually benefits the customer. In this case, polestar is willing to let their leases be extremely flexible as a trade-off for the drivers who will upgrade to a newer and more expensive model.