In the new energy vehicle market, Polestar is undoubtedly a very special presence. Different from many new energy vehicle manufacturers that started from scratch, Polestar was born with a silver spoon in its mouth. As a sub – brand under the well – known automaker Geely, Polestar has abundant resources and advantages. However, recently, there has been news that Polestar is going to close its last store in China. What exactly is going on? What’s happening to this well – known new force in the automotive industry?

According to a report by Business Week, Polestar has closed its last direct – operated store in China, which was located at L+Plaza in Shanghai’s Qiantan area.
In response to this news, Polestar stated that the company is strategically adjusting its business model in China to better meet the diverse and rapidly changing consumer demands in the Chinese market. Currently, Polestar adopts an online sales model in China. Although the stores are temporarily closed, other business operations of Polestar in China are not affected, and the rights and interests of car owners will not be affected either.
According to a staff member of Polestar’s official service hotline, the current main sales model is online. Consumers can learn about product information and complete the car – buying process through digital channels such as the official website.
Polestar is a high – end new energy vehicle brand from Sweden. It was acquired by Volvo Cars under Geely Holding Group in 2015. The brand entered the Chinese market in 2017. In 2019, it established a production base in Chengdu and opened its first Polestar Space in Beijing. It has launched four models: Polestar 1, Polestar 2, Polestar 3, and Polestar 4. In 2020, it established Polestar Automotive (Shanghai) Co., Ltd.
In addition, on June 24, 2022, after Polestar and the special purpose acquisition company (SPAC) Gores Guggenheim announced the completion of their business combination, it officially listed on the NASDAQ. The company name was changed from Gores Guggenheim, Inc. to Polestar Automotive Holding Uk Plc, and it started trading under the new stock code “PSNY”.

Facing Polestar’s current decision to close stores, how should we view this? Where exactly is the future of the well – known new force in the automotive industry, Polestar?
First of all, as a brand from overseas that entered the Chinese market, Polestar has faced huge pressure since it stepped into the Chinese market. The Chinese automotive market has unique consumption habits, policy environments, and competitive landscapes. It is by no means easy for foreign brands to gain a foothold in this large and complex market. Against this background, it is a normal business decision for enterprises to optimize and adjust unprofitable stores in order to cope with operating pressure.
Notably, its parent company has an extensive maintenance and repair network in China. This advantage provides strong support for the subsequent maintenance of the sold products, so consumers don’t need to worry too much about after – sales services. Even if the number of stores decreases, relying on the parent company’s mature after – sales system, it can still maintain a certain level of customer satisfaction and loyalty to some extent. This strategic contraction based on the actual situation is a rational choice for enterprises to seek survival and development in a complex market environment.

Secondly, since its official entry into the Chinese market in 2017, Polestar has never been able to establish a clear, unified, and recognizable brand image. The pricing of its product line is extremely wide: from the plug – in hybrid sports car Polestar 1 with a price as high as 1.45 million yuan, to the pure – electric sports sedan Polestar 2 priced at around 250,000 yuan, and then to the subsequent SUV model Polestar 3, the price range spans from million – level luxury cars to the mainstream mid – to – high – end electric vehicle market. This “roller – coaster” pricing strategy has led to a serious cognitive bias among consumers regarding Polestar’s brand image – is it a luxury performance brand competing with Porsche and Tesla, or a mass – market new energy brand focusing on cost – effectiveness? The answer has always been unclear.
The essence of brand positioning is the process for enterprises to establish a differential advantage in a specific market segment. And Polestar made a serious mistake in this regard: it neither built a subversive technical narrative like Tesla through the “first – principles thinking”, nor created an emotional connection around the “user community” like NIO, nor accurately targeted the needs of family users like Li Auto. Although its product design is supported by Nordic minimalist aesthetics, it has not formed an overwhelming advantage in core indicators that Chinese consumers are highly sensitive to, such as intelligence, battery life, and charging efficiency. As a result, Polestar cannot shake the electrification transformation of BBA in the high – end market, and it is difficult to compete with local brands such as XPeng and BYD in the mid – end market, falling into an embarrassing situation of being “neither here nor there”. This strategic wavering is essentially the common “acclimatization” of multinational enterprises when entering emerging markets – applying the successful experience of the home market rigidly to a completely different consumer culture and competitive ecosystem, ultimately leading to the dilution of brand value and the loss of market positioning focus.
Thirdly, currently, the domestic new energy vehicle market has entered an almost brutal competition stage. All new forces in the automotive industry are going all out. First, they engage in fierce price competition, and then they continuously upgrade and enhance the vehicle configurations. In this highly competitive market environment, enterprises need to have strong determination and long – term strategic vision to stand out.
However, Polestar has performed poorly in this regard. From its official entry into China until 2024, it has changed six heads of the Chinese region in just six years. Frequent leadership changes will inevitably lead to instability in the enterprise’s internal strategic direction and chaos in the implementation level. Each new leader may bring different development concepts and management styles, making the enterprise’s operation lack coherence and continuity. This not only affects the cohesion and work efficiency of the internal team but also makes it difficult for the enterprise to form an effective synergy in the market competition and continuously accumulate competitive advantages. While competitors are deeply cultivating the market and gradually building their own moats, Polestar has missed many development opportunities due to internal turmoil and has gradually fallen behind in the market competition.

Fourthly, although the Chinese market is very important, it is only a part of the global market. For an international brand like Polestar, it cannot pin all its resources and hopes on a single market. In the global new energy vehicle industry wave, each regional market has different opportunities and challenges. The key is to break through the limitations of the local market, examine its own advantages and disadvantages from a global perspective, and find a development path suitable for itself. By optimizing resource allocation, integrating industrial chain advantages, and strengthening technological innovation cooperation globally, it may be able to build its own real competitive advantages and create a moat that is difficult to be imitated and surpassed. This may be what Polestar really needs to consider.
This article is from the WeChat official account “Jianghan Vision Observation” and is published by 36Kr with authorization.
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