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The 'original' Tesla Model 3 rival in Australia is on course for another sales decline this year – after a 40 per cent slide last year – as newer models in Polestar's range steal its thunder.
Polestar 2 sales are predicted to slow for the second consecutive year – after dropping by 40 per cent in 2024 – despite recent price cuts of $5000 across the range.
The first true rival for the Tesla Model 3, the Polestar 2 recorded its best annual sales of 2463 vehicles in 2023, helped by a deal to sell hundreds of cars to rideshare vehicle leasing company Splend.
But the arrival of other new Polestar models – the Polestar 3 large SUV and the Polestar 4, which is branded as an SUV but shaped like a sedan – means that record result is not expected to be repeated.
"Polestar 2's still got a really important part to play, but I would expect we'll probably see the volume on Polestar 2 settle back just a little bit," Polestar Australia boss Scott Maynard told Drive.
"The 4 is a really good value proposition. And because there's lots of people that want a Polestar, but there's probably more people that want an SUV because that occupies such a large proportion of the Australian new car market.
"People that want a Polestar, that now have a choice, I'm sure will probably gravitate towards an SUV-style vehicle, perhaps to an extent, at the expense of 2."
He said the company still expects "healthy volume" out of the Polestar 2, but sales dropping to about 1000 a year would see it outsold 17 – or more – to one by the Tesla Model 3.
The Chinese-owned Swedish brand has previously argued it is no longer a rival to Tesla, but the two vehicles are both mid-size passenger vehicles offering similar driving range, performance and interior space.
The Polestar 4 is larger than the Polestar 2, and starts from $78,500 plus on-road costs – in line with a base-model version of the latter with most option boxes ticked, or a flagship dual-motor model with fewer options.
Many of the Polestar 2s sold since it arrived in Australia in 2022 – when 1524 were reported as sold – have become rideshare vehicles through leasing service Splend.
It initially signed a deal to roll out 500 Polestars, before Uber announced an incentive that would see drivers leasing a Polestar 2 in Sydney from Splend save up to $6000 per financial year through lower service fees.
In 2023, nearly two-thirds (63.5 per cent) of Polestar 2 sales in Australia were to 'business' buyers, which range from customers purchasing under an ABN, to company fleets, and Splend operators.
The Tesla Model 3, Tesla Model Y and BYD Atto 3 have also been popular among Splend customers, but those vehicles have higher demand among private buyers.
Maynard said Polestar's newer and larger cars will see private buyers account for a larger share of the company's sales.
"The new product sits really well with a private buyer and we are finding that our mix of true private retail business is increasing.
"There's still a place for Polestar to work in some of that fleet style business. There are lots of companies operating in Australia that are either mandated to electrify their fleet or genuinely want to electrify their fleet.
"And for those companies, we've still got a really strong offering and they're talking to us. So there'll continue to be some fleet business done.
"But no, it won't be quite as prolific as perhaps it has been in the past, because 2 was just so well suited to that market.
"[Polestar] 2 will continue and will continue to be really well suited to that market, but some of the more premium offerings that we have now are going to speak to a different style of customer and that's where we'll see a bit of an uplift."
The Polestar Australia boss referred to the $5000 price cut on the Polestar 2 as "in part a life cycle effect," and said the brand has no plans for further price changes.
A successor to the Polestar 2 – which was conceived as a Volvo before switching to the electric-car brand – has been confirmed to arrive later this decade.
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
