'We think that's fair' - Polestar says it won't engage in price war with rivals like Tesla and newer brands as the 2024 Polestar 2 becomes more expensive

Electric challenger brand Polestar says it won't enter into a price war with increasingly more affordable rivals that are hitting the local EV market.

Speaking on the possibility of discounts on the remaining outgoing model year 2023 stock currently in the country, Polestar Australia’s Managing Director, Samantha Johnson, said the brand’s strategy was clear.

“We don’t do discounts,” she said at the launch of the heavily updated 2024 Polestar 2.

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“We’re sticking with a fixed-pricing model. We think that’s fair, everyone knows what they’re getting. Obviously, you’ll have cyclical value add inherent to the industry; model year or financial year changes, but we’re not engaging with any price wars we see with other brands.”

Which brand’s might those be? The obvious and most direct rival to Polestar is Tesla, which has frequently altered the starting price of its Model 3 sedan. As of the publication date of this article, the price tag was $57,400 before on-road costs for the base Rear-Wheel Drive.

That’s a significant discount from the $64,300 price tag it had only a few months ago, a starting price it shared with the equivalent Polestar 2 Standard Range.

While some might see it as a kind of altruistic move to offer such significant discounts, thereby making a longer-range electric vehicle more affordable, it also serves the purpose of burning buyers who purchased one recently for a significantly higher price, whose cars now not only seem overpriced, but have taken a sudden and immediate drop in resale value, too.

Polestar instead sees its rigid pricing structure as fairer to its buyers, although the delta now between the base model Standard Range Polestar 2 and the Rear-Wheel Drive Tesla Model 3 is some $10,000 - no small sum.

Of course, Tesla’s move to discount is because the brand has entered into a price war with Chinese rivals overseas, the effects of which have spilled into our market.

When the Polestar 2 first launched, it was one of few electric cars on the market with a price tag beginning in the low $60,000 region, but now, just 18 months later, there is a whole new price category below thanks to MG, BYD, and GWM.

The three Chinese automakers do seem to be engaged in a race to sell Australia’s most affordable electric car, with the BYD Dolphin hatch ($38,890) undercutting the MG4 ($38,990) and GWM Ora ($39,990) by a razor-thin margin.

While the 2024 Polestar 2 is now far from a budget EV offering, it does offer significant upgrades to go with a very minor exterior facelift, including a switch to rear-wheel drive, significantly more power for single-motor variants, significantly more cruising range thanks to upgraded efficiency and larger batteries, and the inclusion of previously optional items like blind spot monitoring and rear-cross traffic alert.

Prices start from $67,400 for the Standard Range, which can now travel 532km between charges, and go up to $74,400 for the Long Range which is now one of the longest-range EVs in Australia thanks to its WLTP-certified 654km cruising distance, or $76,400 for the Long Range Dual Motor which reduces cruising range slightly to 591km.

Polestar has made no secret of the fact that its range will become more expensive, with global CEO Thomas Ingenlath explaining earlier this year that the brand is “on a different mission” to Tesla’s volume-driven approach, and that the brand had always intended to operate in “the premium luxury segment”.

Next up for Polestar will be the Polestar 3 large SUV, which will cost between $132,900 and $141,900 when it arrives in quarter two, 2024.