EV maker Polestar lures disgruntled Tesla owners with discounts
By Zaheer Kachwala and Marie Mannes
(Reuters) -Nearly half of Polestar (NASDAQ:PSNY)’s global sales in the quarter through March came from hefty discounts targeting disgruntled Tesla (NASDAQ:TSLA) owners, an executive for the Swedish EV maker said on Thursday, after it reported a 76% surge in deliveries.
The offer, which gives Tesla owners in the U.S. discounts of up to $20,000 towards a Polestar 3 lease, helped power sales to 12,304 vehicles in the first three months, Polestar’s U.S. head of sales, Jordan Hofmann, told Reuters.
The Polestar discount campaign appears to be an attempt to take advantage of a backlash against CEO Elon Musk’s Tesla brand amid slower-than-expected EV demand and worries that higher tariffs may raise vehicle prices.
Tesla’s stock has dropped 32% so far this year from poor sales and record trade-ins amid criticism of Musk over the billionaire’s controversial role in the Trump administration as he works to slash federal government spending.
A long range, dual motor Polestar 3 with all the upgrade packs would cost around $93,000, the Polestar website says, but for Tesla owners using the discounts, the price would sink to $73,000. A Tesla Model S starts at just under $80,000.
"We piloted a conquest campaign in late February. Based on the positive response we ran a new campaign for the month of March. We are currently running a similar campaign for April," a spokesperson for Polestar told Reuters.
The offer is valid for its Polestar 3, which is produced in a Volvo (OTC:VLVLY) Cars factory in South Carolina.
POTENTIAL PRICE RISE
Polestar joins a throng of automakers scrambling for market share as shoppers in the U.S. and beyond scour dealer lots to try to snap up a car purchase before any potential rise in prices from the higher U.S. tariffs.
Ford Motor (NYSE:F) and Stellantis (NYSE:STLA) offered deep discounts starting this month, and Hyundai (OTC:HYMTF) committed to keeping prices stable.
Polestar has been trying to expand its production base in the United States and reduce dependence on China - a strategy more significant now after U.S. President Donald Trump imposed sweeping tariffs on the world’s largest auto market.
Indeed, both U.S. and other automakers are trying to enhance their manufacturing footprint. General Motors (NYSE:GM) last week told workers it would increase output at a factory in Indiana, and Hyundai committed to a $21 billion investment in the U.S.
Polestar said earlier campaigns had been positive.
"The numbers speak for themselves. This week saw some of the highest order days for Polestar 3, and the response to our Tesla Conquest Offer has been incredible," Jordan Hofmann, Polestar’s head of sales in the U.S., said in a LinkedIn post a month ago.
The company did not provide additional details or quantify the impact of the previous promotion.
U.S. EV maker Lucid (NASDAQ:LCID) also hopped on the trend, offering discounts of up to $4,000 for purchases of its luxury Air sedans if a customer trades in a Tesla vehicle.
Last year, it underwent an executive shakeup and appointed a new CEO with the aim of getting closer to profitability, raising sales and securing a steady line of funding.
