Polestar taps dealers for sales recovery plan

WINDING down a focus on online car sales with a shift in retail responsibility back to traditional dealers is not a common trend in 2025, but it is a precise part of Geely Automotive Holdings (GAH) brand Polestar’s aggressive financial turnaround plan. 

GoAuto spoke with Polestar global chief executive Michael Lohscheller on the sidelines of the reveal of the Polestar 5 super-sedan at the recent IAA Munich Motor Show, an event marked by intense China-Europe competition anxieties and demands from most European manufacturers to slow CO2 reduction mandates. 

Although Mr Lohscheller – previously the chief financial officer of Opel AG, Volkswagen of America and Mitsubishi Europe – was appointed to the role 11 months ago in part to cut costs, improve margins and increase sales volume, Polestar came out swinging in favour of retaining ultra-strict emissions laws. 

He told GoAuto that Polestar remains steadfast in not dumping its signature commitment to only building battery electric vehicles (BEV), other pillars are all up for debate. 

For example, more affordable Polestar models with broader appeal are being pulled forward while traditional dealer expertise is being tapped. 

“We work with retailers in all global markets,” said Mr Lohscheller. “Most of them, if not all, are Volvo retailers, too. We want to be as close as possible to consumers.” 

“While the direct-to-consumer business is an option, I personally believe that to be close to customers, to give advice, to really offer them (good) service, to talk with them, to have different offers, there is a secret. I call it the renaissance of the dealers.” 

Mr Lohscheller shared his concern that many buyers remain spooked by an online sales model, which was a significant concentration for Polestar in its earlier years as an independent brand. 

“It needs to be easy to buy a Polestar,” he said. “If you can only do it online, some people feel uneasy. If you order online (there are questions about) when it comes, and to which port.  

“When you have a dealer, you have confidence in that dealer (who will manage when) you will get it and follow up.” 

Polestar Australia managing director Scott Maynard is on board with the plan, though there is no short-term plan to deviate from the local hybrid agency model that sees stock owned by the brand itself. 

“The rollout of the retail network has definitely played a part (in sales increasing in 2025),” Mr Maynard told GoAuto in July. 

“We are getting a good response from our partners in retail and by having a few more spots to sell our cars in the right places. There are one or two more to fill there.” 

There are currently 12 Polestar ‘spaces’ in Australia and 19 service points with a concentration in Sydney, Melbourne, Brisbane, Adelaide and Perth. Regional locations are presently limited to Geelong, Canberra and Launceston.  

It is a strategy that simultaneously spreads risk and reduces costs for the central Polestar business while increasing the visibility of the Polestar brand with an expanded retail footprint, often in close proximity to Volvo showrooms frequented by customers that might be open to a Polestar. 

The move back to dealer retail is also about trying to increase the quality of Polestar sales, which management feel were far too skewed to rental and large fleet customers in early years to post positive numbers on paper. In Australia, Polestar now regrets selling large numbers of vehicles to Uber-related fleet companies. 

“Everybody tried really hard to put (Polestar 2) on the road, sometimes with deals that shouldn’t happen,” Mr Lohscheller said. 

“{It was} too broad with too much rental business. We want to really focus more on retail and {small} fleets. That is why the retailers play such an important role. 

“We will transfer more and more responsibility to the retailers, because they know small fleets. They know the customers. I think they can do a much, much better job in selling cars like the Polestar 2, 3, 4, and 5, and then later the 7.” 

Stemming losses and establishing sustainable profitability are key goals for Mr Lohscheller, who is attempting to manage reactions to a $US1 billion ($A1.5b) Q2 2025 reported loss, made up for the most part by a huge write-down for the Polestar 3 due to the impact of tariffs and softening demand for luxury BEVs. 

Despite the fact Volvo and Polestar are independently managed (with Polestar being a publicly listed company on the Nasdaq stock exchange), internally, both Sweden-based brands make up part of GAH’s premium European vertical in contrast to GAH China marques like Geely, Zeekr and Lynk & Co. 

Going together with the plan to emphasise physical retail in the Polestar universe is a plan to increase sales volume generally. 

Discounting across the line-up in 2025 has led to a 51 percent uptick in global Polestar sales this year and a 46 per cent YTD increase in Australia to 1631 units. 

“Momentum is something that is really important in the automotive industry, because once everybody sees this, retailers say hey, look, this Polestar thing is really interesting; they have great cars and a very well-positioned brand,” Mr Lohscheller told GoAuto. 

To that end, Mr Lohscheller has promised retailers and customers that a lower-cost small SUV model called Polestar 7 will roll into showrooms in early 2028, with the brand throwing all available resources at the model’s development after the CEO pulled funding from work on the ultra-luxe Polestar 6 convertible. 

GoAuto understands that the lifespan of the Polestar 2 – the most affordable model in the line-up – has been extended, though a second-generation version is also entering development. 

Along with the Polestar 7, this should give retailers two lower-priced models to sell, as well as the mid-priced Polestar 4 and luxury Polestar 3 and Polestar 5.