How agency is working for Polestar retailers

Polestar is on a roll. The Tesla-rivalling electric car brand now has around 8,000 cars on the road in the UK. By the end of the year, there will be more than 12,000 on the road. “Once you get above 10k cars, you start to see them a lot more – it’s great for brand awareness,” UK CEO Jonathan Goodman told Auto Retail Profit.

Polestar, born out of Volvo and now listed on the Nasdaq, has always operated a direct-to-consumer (DTC) model. Retailers invest to be agents for the brand. “The industry needs to change, and it’s easy to do when you’re a newcomer, rather than a 90-year-old brand. DTC makes things far more instantaneous for brands, and delivers more value to the customer over the life of the car. No other brand in the UK is doing it quite like us.”

It’s good news for retailers too, insists Jonathan. “Lookers COO Duncan McPhee said that if everyone does agency like Polestar, he’ll sign up tomorrow.” Here are six ways Polestar is making agency work.

Retailers are central to the Polestar DTC model

“All our Spaces [Polestar’s name for showrooms] are operated by independent retailers. They do a far better job than we ever could.” Jonathan says Spaces are run in accordance with Polestar guidelines, but there’s a lot of trust in the hands of the retailer to operate day-to-day in their own way.

Polestar takes wholesale pressure off the retailer

Polestar holds the stock, so retailers don’t have the cost pressure of wholesale, and can instead concentrate on the customer. “If we get the numbers wrong,” says Jonathan, “it’s our fault; retailers won’t be pressured.”

Regional commission is based on every car sold

Employees in Polestar Spaces are paid a fixed salary. They are not on commission. This is paid to the retailer when a car is sold in their regional area – whether the customer has visited the space or not. “We draw a line around each retailer: anyone who buys a car within it delivers commission to that retailer.”

Polestar Spaces are to double in the UK

Polestar currently has three Spaces, in London’s Westfield (run by Endeavour), Manchester (operated by Lookers) and Birmingham (opened by Paul Rigby). “I am massively happy with them – they are all doing a great job.” There are more to come, with Battersea Power Station opening in the autumn. By the end of 2023, the number Polestar Spaces in the UK will double, and include its first Space in Scotland.

The brand will grow before the retail footprint

“Our retailers will make money, even as we grow the number of sites,” says Jonathan. “We will grow the brand before we grow the number of Spaces.” Sales are up 78% year-on-year and Polestar aims to double overall sales in 2022, with further significant growth in 2023 as the new Polestar 3 SUV arrives.

Customers are happy with agency

DTC is like pushing an open door with customers, says Jonathan. “Nobody walks into a dealer just to waste their time. By moving to agency, it means people are not sold to, but consulted with. Our customer satisfaction levels are already very high and this can only develop further as these relationships are nurtured.”