We’ve been promised an electric future, and slowly but surely, it’s starting to appear over the horizon.
Manufacturers have been able to develop technologies to quell range anxiety, and work with power providers to create robust charging infrastructure. Government support, most visibly in the form of tax credits to consumers, has helped to lower the effective retail price gap between electric and gas vehicles. Demand is building.
As with all trends in the automotive industry, economics drive the direction of change. Developing and selling EVs has not yet turned into a profitable activity, even if Tesla stock prices give a different impression. Established car makers have been forced to get creative to try to leverage their existing assets to build a new electrified future, and find themselves in competition with startups (like Tesla), who can sometimes be decidedly nimble and focused on the task.
Volvo recognized the need to move to electrification early, and has committed to hybrid, plug-in hybrid and all-electric vehicles. At the same time, they wanted to get the startup advantage – a clean slate, fresh identity, and certain tax benefits, and the Polestar brand was born.
Polestar was founded in 1996 as a race engineering company, and became the official Volvo tuning partner in 2009. Volvo bought Polestar in 2015, and there have been “Polestar Engineered” trim levels and packages since then. Polestar became a separate company again in October 2017, now owned jointly by Geely (Volvo’s parent company) and Volvo, with the mission of becoming a “pure performance electrified brand.” Polestar’s home office is in Gothenburg, Sweden, and the Polestar production center is in Chengdu, China. Polestar 1 was the company’s first vehicle, a halo car with a total run of 1,500 units over three years beginning in 2019. The 2021 Polestar 2 is now arriving in the United States with the target of selling 2,000 units this year and tens of thousands next year.
By splitting off from Volvo (on paper, at least), Polestar is able to reset the counter on the US Government’s Federal Electric Vehicle Tax Credit. According to the Environmental Protection Agency’s FuelEconomy.gov, “All-electric and plug-in hybrid cars purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to power the vehicle. State and/or local incentives may also apply.” This tax credit lasts until a manufacturer has sold 200,000 qualifying vehicles, and then quickly sunsets and expires in the subsequent four quarters. Volvo has been eating into its 200,000 credits with its plug-in hybrids. With a fresh start and its own VIN run, Polestar will get a running start at Federal and state credits, where available, giving it an advantage over the obvious target, Tesla.
None of this matters unless the Polestar 2 is any good.
Read more: Forbes
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