Polestar to drop $20 million in Q2 to market its first crossover

While Polestar expands its lineups, the automaker will stick with its small-footprint retail strategy.

The digital-first retail model avoids high-dollar dealership investments, relying instead on low-cost “Spaces” in malls and mixed-use urban developments. Those stores are essentially information centers of 2,000 to 2,500 square feet run by franchised dealers selected from Volvo’s retail network. Polestar vehicles are serviced at the dealers’ Volvo stores.

But the Polestar model is evolving as the brand enters less EV-friendly coastal markets and brings higher-volume product.

Polestar has debuted a new store format called Destination for suburban markets. Those standalone stores, located in easy-to-access sites, will perform vehicle hand-overs to customers and could include service departments.

The expansion is about giving Polestar dealers options, rather than issuing a mandate, Hembrough said.

“We’re not saying, ‘An SUV is coming, everybody’s got to destroy their showrooms and build something new, and it’s got to be bigger,'” he said. “This allows the dealership an opportunity to do something fitting for the marketplace but still is very much within the brand.”

Polestar’s central stock inventory strategy won’t change with the arrival of SUVs. Dealers don’t stockpile inventory — instead, they carry just 10 to 12 units for impulse buyers.

“We will not go into a wholesale business model,” Hembrough said. “Most of the floorplan and inventory holding costs will continue to be on Polestar.”