On a late July night, Tesla CEO Elon Musk stood onstage exterior the automaker’s Fremont, Calif., manufacturing unit. Behind him, side-by-side movies have been projected on a big display screen exhibiting a Tesla Mannequin three and a Volvo S60 present process side-impact crash exams.
“On one aspect you may have one of many most secure automobiles on this planet, a Volvo S60,” Musk stated, with cheers, then laughter from Tesla staff because the S60 driver-side door caved in whereas the Mannequin three door barely budged. “The Volvo is arguably the second-safest automobile on this planet.”
Although simply throwaway strains on the Mannequin three sedan launch, Musk’s remarks spotlight a rising competitors between the upstart electrical car maker and the Swedish luxurious model.
Each are bucking efficiency and gross sales traits, with an in depth eye on China. Whereas Tesla has skyrocketed in worth off flashy merchandise, lofty targets and Musk’s public persona, Volvo’s 90 years of expertise coupled with huge Chinese language financing may unseat Tesla from its perch as a high tech and luxurious EV model.
“With the monetary backing Volvo’s bought, they’ve the flexibility to strive new issues that they might not have been making an attempt earlier than,” stated Karl Brauer, government writer of Autotrader and Kelley Blue E book. “They’ll place themselves in a manner they’ve by no means positioned themselves earlier than.”
Lower than three months after the Mannequin three launch, Volvo held a flashy introduction of its personal: the Polestar electrified efficiency car subbrand.
The brand new product line, a part of Volvo’s technique to impress all new automobiles beginning in 2019, is to include the Polestar 1, a hybrid efficiency coupe; Polestar 2, a higher-volume all-electric sedan; and Polestar three, a battery-electric SUV. Whereas discussing the sedan — due in late 2019 — Polestar CEO Thomas Ingenlath had Tesla sq. in his sights.
“We need to go all-in, to the place it is taking place, to the place it is cooking,” he stated. “We determined to construct an electrical automobile that might be becoming a member of the competitors across the Tesla Mannequin three, bringing an thrilling, interesting midsize battery car to the market.”
A spokeswoman for Tesla stated the automaker welcomed competitors to advance the marketplace for EVs.
“Each compelling EV on the highway is a win for Tesla,” she stated in an emailed assertion.
Earlier than heading Polestar, Ingenlath led Volvo’s design turnaround after Zhejiang Geely Holding Group purchased the automaker from Ford Motor Co. in 2010.
With an $11 billion funding from its new Chinese language proprietor, Volvo rolled out a slew of well-received merchandise full of superior driver help expertise.
The makeover drove a gross sales streak, with 461,313 automobiles bought globally within the first 10 months of 2017, and a goal of 800,000 automobiles bought yearly by 2020. With Polestar, the automaker is branching out of its conventional buyer base to a extra area of interest, performance-minded purchaser.
Polestar’s Ingenlath: “We determined to construct an electrical automobile that might be becoming a member of the competitors across the Tesla Mannequin three.”
Gallery 2018 Volvo XC40
“It seems to be like Volvo and Geely are firing on all cylinders proper now,” stated Dave Sullivan, an analyst at AutoPacific. “The quantity of product they’re turning out proper now and the companies they’re asserting, is fairly notable for the dimensions of the corporate.”
Tesla made a splash — and angered state dealership associations — when it stated it will promote its automobiles direct to clients, bypassing the decades-old dealership franchise mannequin. By interacting immediately with clients, the automaker has argued in varied lawsuits, it may finest educate shoppers on EV expertise.
Volvo launched its Care by Volvo gross sales mannequin in September with the disclosing of the XC40 compact crossover. Care by Volvo permits clients to subscribe to automobiles for 2 or three years, paying a flat month-to-month price that features upkeep and insurance coverage with no down fee and the choice to commerce for a brand new car on the finish of the time period.
Polestar automobiles might be bought completely on this manner, utilizing an online-only course of. However these companies lean on Volvo dealerships for service and administration, and Polestar stated it’ll open stand-alone showrooms for patrons who need to see automobiles in-person — much like the galleries Tesla operates in states that ban direct gross sales.
“They’re providing a special tackle car possession, taking away doable excuses as to why somebody would not need to purchase a car,” Sullivan stated. “It positively will get folks speaking. They’re an organization taking a look at doing issues a special manner.”
Although Volvo is exploring new gross sales avenues, the flexibility to depend on its legacy dealership community shields it from among the authorized issues Tesla has had in sure states.
“They’ll have automobiles in all 50 states. They do not need to battle any legislators or vendor teams,” KBB’s Brauer stated.
As laws tighten, China has turn out to be the most important provider and shopper of EVs, with 707,000 manufactured within the nation by Chinese language and international automakers in 2016, in accordance with consultancy McKinsey.
Tesla automobiles have been particularly common in China, rising to $1.07 billion in gross sales in 2016 from $319 million in 2015, in accordance with an organization SEC submitting. Musk has instructed traders the corporate is in talks with native regulators to construct a manufacturing unit in Shanghai. Such a plant may reduce delivery prices and car costs, which might be as much as 50 % costlier in China than within the U.S.
Throughout a name with analysts this month to debate third-quarter earnings, Musk stated Tesla will not spend main capital in China till 2019, with car manufacturing starting in about three years.
“It is actually the one solution to make the automobiles inexpensive in China,” he stated. “But it surely’s actually three years out.”
Volvo has three manufacturing operations throughout China that produce the S90 sedan with plans to construct upcoming 60- and 40-series automobiles. The corporate can also be constructing a manufacturing middle for Polestar automobiles in Chengdu, China, as a result of open by mid-2018. The nation has turn out to be Volvo’s largest market, with 90,930 automobiles bought final yr.
“It is not simply the U.S. Volvo’s taking a look at. It is also China,” Sullivan stated. “One factor Volvo has going for it’s a nice distribution community, one thing Tesla nonetheless does not have.”
With its Polestar subbrand, Volvo is branching out of its conventional buyer base to a extra area of interest, performance-minded purchaser. The Polestar 1 is among the many automobiles introduced for the subbrand’s lineup.
“Volvo turns up the warmth on Tesla” initially appeared in Automotive Information