Polestar CEO Thomas Ingenlath on life after Volvo and weathering the EV slowdown

This episode delves into the challenges and strategic transformations at Polestar under CEO Thomas Ingenlath's leadership, particularly in the wake of its separation from Volvo and amidst a slowing EV market.

1. Polestar is navigating its post-Volvo era by leveraging Geely's resources while establishing a unique brand identity in the luxury EV market.
2. The introduction of new models like Polestar 3 and Polestar 4 marks a significant step in expanding the company's product lineup and competitive edge.
3. Ingenlath emphasizes the importance of vehicle design and user experience, which remain central to Polestar's strategy amidst evolving industry trends.
4. Despite the current market slowdown, Polestar remains optimistic about the long-term prospects of EVs due to technological advancements and market dynamics.
5. The discussion also covers the impact of software on automotive design and operation, highlighting partnerships with tech giants like Google and regional adaptations in China.

1: Introduction to Thomas Ingenlath

A brief overview of Polestar's history and its evolution under CEO Thomas Ingenlath. Key topics include the company's strategic pivot away from Volvo and its ongoing efforts to carve a niche in the competitive EV market.

• Thomas Ingenlath: "Polestar has matured from its Volvo roots to forge its own path in the EV landscape."

2: Discussing Polestar's Strategic Shifts

Insights into Polestar's operational and strategic shifts, focusing on its model lineup expansion and independence from Volvo.

• Thomas Ingenlath: "Our goal is to redefine Polestar as a standalone entity within the Geely family, focusing on high-end electric performance."

3: Technological Innovations and Partnerships

Exploration of Polestar's technology strategy, including its use of Android Automotive OS and partnerships for enhancing in-car technology.

• Thomas Ingenlath: "Collaborations with Google and regional partners in China are crucial for our tech-forward approach in the EV market."

4: Future Outlook and Industry Challenges

Discussion on the future of Polestar and the EV industry, addressing challenges like market acceptance and technological integration.

• Thomas Ingenlath: "We are optimistic about the future, despite current challenges in the EV market."

1. Embrace technological innovation in personal and professional contexts to stay ahead in a rapidly evolving world.
2. Consider environmental impacts when making purchasing decisions, especially with regard to vehicle choices.
3. Stay informed about industry trends to better understand market dynamics and opportunities.
4. Explore partnerships and collaborations to leverage collective strengths in any business venture.
5. Prioritize design and user experience in product development to enhance customer satisfaction and brand loyalty.

Today, I’m talking with Polestar CEO Thomas Ingenlath, whom I first interviewed on the show back in 2021. Those were heady days — especially for upstart EV companies like Polestar, which all seemed poised to capture what felt like infinite demand for electric cars. Now, in 2024, the market looks a lot different, and so does Polestar, which is no longer majority-owned by Volvo. Instead, Volvo is now a more independent sister company, and both Volvo and Polestar fall under Chinese parent company Geely.

You know I love a structure shuffle, so Thomas and I really got into it: what does it mean for Volvo to have stepped back, and how much can Polestar take from Geely’s various platforms while still remaining distinct from the other brands in the portfolio? We also talked about the upcoming Polestar 3 SUV and Polestar 4 crossover, and I asked Thomas what he thinks of the Cybertruck.

People

Thomas Ingenlath, Neil Patel

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Polestar, Volvo, Geely

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Neil Apatel

Hello and welcome to Decoder. I'm Neil Apatel, editor in chief of the Verge, and Decoder is my show about big ideas. Other problems today I'm talking with Polestar CEO Thomas Ingelath, who I first interviewed on the show back in 2021. Those are heady days, 2021, especially for upstart ev companies like Polestar, which all seemed poised to capture what felt like infinite demand for electric cars here in 2024, the market looks a lot different. And so does Polestar, which is no longer a majority owned by Volvo, but now a more independent sister company, which sits next to Volvo under chinese parent company Geely.

You know, I love talking about structure shuffles here on Decoder. So Thomas and I got into it. What does it mean for Volvo to. Have stepped back its investment? And how much can Polestar take from Geely's various platforms while still remaining distinct from other brands in the portfolio?

Thomas actually has a refreshingly candid perspective on why people pick certain cars. He thinks it's desirability, which he rates as the number one factor for Polestar, and that affects how he and Polestar think about its relationship to Volvo, to other luxury carmakers, and to the EV market in general. And make no mistake, Polestar is trying to grab more of that market. The first time Thomas talked, Polestar's only mainstream car was the well reviewed Polestar two. But this year, Polestar expects to start delivering the Polestar three suv to customers, and it will debut the crossover Polestar four, filling out the model lineup and hopefully competing for more attention from car shoppers.

Of course, it wouldn't be a decoder car episode if we didn't talk about software in the cars and how it's changing. Unlike so many of the car executives I talked to, Thomas doesn't really see software as a big revenue opportunity. Polestar cars today run the Android Automotive OS in partnership with Google and in China. Polestar just partnered with Xinji Meizu, another Geely company, to use a platform called Fly Me OS. You'll hear Thomas talk about that partnership and where Polestar is comfortable ceding control of the in car experience to Apple, Google, and others.

At his heart, Thomas is still a designer, so I had to ask him about the recent trend in car design, which is going in two directions. On the one hand, you have some retro future ideas from Rivian, Hyundai, Kia, and others. And on the other hand, you have the triangle aesthetic of the Cybertruck. I gotta say, Thomas's response to the Cybertruck, one of the best I've heard in the industry. Okay, Polestar CEO Thomas Ingelat.

Nilay Patel

Here we go.

Thomas Ingenlut, you are the CEO of Polestar. Welcome back to Decoder. Hi, Neelaik. Great to be back here. I am very excited to talk to you again.

Your first conversation with us in 2021 was like a highlight. We just started the show, and you were one of the first car CEO's to come on the show with us. You took a risk. Thank you so much. I look back on that episode fondly.

Thomas Ingelath

Yeah. And that seems now like a long time ago. Three years ago is a long time ago, but also the whole car market has changed. In those three years, a lot of things have happened, and it's the assumptions I think we are all making about the car market in 2021 have radically shifted. EV demand has changed.

Nilay Patel

Demand for hybrids has gone back up. The competition has changed. Your big competitor in Tesla has really changed, and Polestar itself has changed. I hope you're ready for this conversation. We got to cover all of it.

Let's start with Polestar itself. There are some fundamental structure changes that I think will help me understand everything else. Decoder is fundamentally a show about structure. Polestar just went through some big structure changes. The last time you were on the show, the majority owner was Volvo.

That's changed. Volvo has stepped back. I think it's 18% ownership stake now. Geely, the parent company of both Volvo and Polestar, is more funding. Polestar, I have a quote from you from last time.

This is one of the reasons I love that episode of the show, because it's such a good quote. I asked you to describe the relationship to Volvo and you said, volvo is our parent company. Polestar was born there. Volvo has raised its baby. It's growing up and becoming an adult.

We are in the process of moving out, earning our own money. We will always be some kind of family, but of course we will develop our own life. That appears to have happened like you've moved out of vulva. What is that relationship like now? Well, it's still a relationship.

Thomas Ingelath

It's still family. You never can do whatever you want. Once you're family, you're a family, but you grow up and you move out and you become more independent. You might as well, you know, that happens in families. There are periods of bigger distance, periods when you find together again a bit closer.

Having said that, compared to what 21 was laid out as a plan, it's really that is not that much of a change that we would. And let's face it, the cars, for example, that are testonomy to that growing up, were in the development at that point in time, that from a very early polestar one, even Polestar two, still tight relation to Volvo. To post a three and a four growing a bit more into an obvious the products show it independent company is part of the long plan. But I would love to point out what actually was not as visible in 21. And maybe it's really different now where we find it us now in 24.

One element that we have been talking about now a lot is how much indeed, innovation, speed, relevant electric mobility, relevant technology, of course, has accelerated, developed momentum and dynamics within the Geely group in other brands, where it is of course relevant for us to actually broaden our way of using the brand portfolio, technology portfolio and actually hooking up and doing things on a broader range within the Geely group. I think that's reflecting what's happening in the world. Let's face it, China EV's did not become such a competition. And you could call it threat to the oems in this world because of subsidies. I mean, Jesus, they are technically competitive, highly competitive.

That is what makes them a threat. We should be a little bit more honest about that. And for that reason, the advantage for us to hook up to that technology as a european oem, I mean, Polestar is here in Sweden, a very european company. We are harvesting and using that technology as well to go forward. The ownership structure my God.

One thing is Volvo is reducing but 18% stake that they keep. Certainly it's beyond whatever you would call a strategic partnership. That's heavy involvement. That is a strong ownership still relationship that we have in terms of producing cars together. Developing technology together is untouched.

For that reason. I would love anyway, any investor talking about Polestar, I always try to separate that. One thing is the ownership structure, the other thing is the technology. And where we produce cars and stuff that is different. We are on the track to be much more of a manufacturing footprint wise global company.

All of that is much more on the move. We will gain with this reduction of ownership of Volvo from something around 48 to this 18% actually do something very, in the long run, beneficial for Polestar, and that is increase our free float. And that was almost a promise to when we listed the company, that would be an effect that the big main owners would actually let go of some of the ownership in order to increase the free float and let other people participate in it. It. So in a way, you can read it.

We might have even talked about it in 21. That was always a story, but turbulent times. Of course, this is a world which is, of course, in a lot of developments. We have seen the EV market, and that's a strange thing. 21.

If we would have talked, we still had to actually talk about the conviction that EV's would be that that's a technology. Then, funnily enough, we have seen within that time, 22, 23, big wave, yes, electrification, all the OSM suddenly saying, oh, yeah, we will do it till year x epsilon. And now within that short time, there's a swing back again. I mean, you can see how fast these things are happening. Having witnessed that the last three years, I'm actually not that worried about what is talked about today, about, oh, yeah, it's now hybrids, and let's stick to the ice train cars, you know, that is going backwards and forwards so quickly.

I think the conviction that we have about the technical superiority of the electric drivetrain and the necessity to reduce CO2 will naturally, you know, you have to focus on that long, long term thing, and that is electrification will be the enabler to be innovative, keep people actually interested in cars, because that's where the. The tech is happening and make us make progress on the journey of decarbonization. Yeah, you've hit on almost every single thing I want to talk about, so let's take them in order. The thing you're mentioning, right, the furious rush in 2021, 2020 to electrification, all these announcements, and then the pullback definitely want to talk about that. Just the financial climate back then with low interest rates, lots of free cash, people made very different kinds of decisions.

Nilay Patel

That has obviously changed now as well. But I just want to stick on Volvo and Geely for 1 second. You mentioned something really interesting here, which is the chinese EV market has not developed because of just state subsidies from China, that there's technical superiority in some of the products. Obviously, Geely is a chinese company. I believe right now they've passed BYD at least in some months for total ev's shipped in China and the world.

That is a furious battle back and forth. What are you pulling from their platforms, from their technical developments forward that give you an edge in the markets here? There's technology that we use, for example, building a polestar four on technology that is coming from the Chile group. There's elements like electronic architectures where we definitely can harvest things that are developed in the Gili group and that we take as the starting point, for example, for the Polestar five, to then develop the electric architecture on the polestar five on this basis. That's where the speed is here.

Thomas Ingelath

The key point. It's not necessarily just that there's some genius element in it, it is just that how fast you can move things forwards, how quickly you get to a product, the openness to actually implement, change and react on the demands and the wishes that we have as a brand and to incorporate that, that's really where we benefit in working together with them. Yeah, but I mean, clearly the real windowless, virtual real window poster four. Yeah. It's a first product where I think it becomes very tangible how that technology is a very, very good base for us to actually develop a very polestar.

Interesting for the consumer, amazing product on it. One thing I think about with all of the car conglomerates is there's an element of brand segmentation within them, and then there's some of them that are just sort of open, competitive friction. So I would say GM does a very good job of just very crisply segmenting its brands. You buy a Cadillac at the top in the market, you buy a Chevy at the bottom. That's it.

Nilay Patel

Hyundai and Kia seem to be locked in ferocious sibling rivalry, which I think is making them both better. How does that feel for you inside of Gili with Volvo? I want to point out this is a radio show. Thomas is smiling. He smiled a lot when I asked that question.

He's still smiling. Yeah. You see, because it's an interesting story, we tend to always categorize it. Oh, yeah, there are these companies where there's very clear structure, and then there is this where you feel like, okay, are the borders a bit fluent and stuff? And yes, there might be that generalization you could maybe apply.

Thomas Ingelath

Having said that, and having worked in a Volkswagen group for a long time, for two decades, I was within the Volkswagen group when actually a lot, a lot of brands were bought. I took, I call it now, this german rationalism, and you want to put it all in a box. And there was a big effort to structure it, and to a high degree, it has been structured, was a very clear brand mission stuff. Having said that, was there not friction and discussion between the brands and stuff? Of course there was.

You could see that between Volkswagen and Skoda. You could see this between Audi and Porsche. So even if you try to do that, there will be some kind of friction happening. And I always try to explain everywhere, look, that's normal. That is the normal friction that you even have in any well functioning family.

The question is how much does that lead to a creative growth of the collective whole, or how much is that actually disturbing the development of the individual brands? And that's, I think, the more healthy parameter, whether that, as a general thing, creates a positive creative dynamic for the group, or is it something that is actually destructive and much more than are we all nicely boxed in into our segment? So for the. Let me give you some examples there. So I would say the ferocious rivalry between Hyundai and Kia is working for them because they are putting out radically designed cars.

Nilay Patel

Like, they're probably pushing forward more than any mass market automaker. Like, they make a lot of cars, but they are designing at the boundaries, which is cool. They've raised awareness of both brands, at least here in the United States, and they're growing market share for both brands. That's working for them. Is that sustainable?

I don't know. It feels like you could enter into that kind of relationship with Volvo, which has a bunch of small EV's, and you could grow the total EV market share of Volvo and Polestar in the United States by just going at it. Or you could say, this is how much market share we want for both, and we're just going to move customers between them. I don't think anybody actually ever picks the second one, but that's more companies in this situation end up moving customers between them than actually growing the total number of customers. How do you avoid that outcome?

Because it seems like the goal is to grow the total number of EV market share. It's, for me, so clear. Yeah, I'm so convinced that we have a chance to actually grow significantly the reach and the group of customers that we address for a simple reason, having been within Volvo, working for them, and I would say successfully building a lineup of cars that actually reposition Volvo in that premium segment, but with a very distinct brand being so much about an inclusive brand. Actually, even people who don't buy a Volvo are very positive. You know, you never are offending anybody with a Volvo.

Thomas Ingelath

It's a very inclusive, value driven brand that is obviously centered to the original core of safety. Developing that into the modern autonomous drive safety kind of. It's very well positioned. But how much did I see as well, that there are a lot of customers for Mercedes AMG, for a sporty Audi customer who we obviously cannot easily now with a Volvo product address. Because, let's face it, that needs a different profile of car, different profile of attributes.

And that's actually one of the starting points now, talking as a designer, where I felt like, wow, this scandinavian design world actually has as well a more techie, a more sporty corner, which we at the moment, rightfully should not address with the Volvo brand. So reaching out to say, come on, that part of the premium, let's create a new scandinavian brand that is actually catered to capture those customers. A bit more provocative, a bit more controversial. Not pleasing everybody, daring to do a car that has no real window, but only a virtual mirror, that is something that it can do with a brand that is actually that much more, you know, controversial. And having a chassis that actually is that much more catered for the driver that indeed the kids in the second row might get a tiny little bit more of a hump when they cross speed bump, I mean, all these things that we can do now with Polestar, in order to actually build that more driver centric, more provocative, more power driven experience being as well, more techie in the material expression, not old, is warm and comforting, all the stuff.

But if we would ever had done it at Volvo, Hawkand would have told me, oh, you know, that's too german, too tacky, that's too cold to do that. A bit more cool, cold expression in a tech way. That's why I feel we very well position these two brands peacefully next to each other. I had that very clear statement recently. Polestar three standing next to an ex 90.

Both cars very much on the same wheelbase, same technology, starting point, but so different in what it offers to the customer and visually different. I mean, if you don't see and get the difference between Polestar and Volvo. Looking at these two products, then I can't help it. I think we are on very healthy ground when it comes to brand differentiation. We need to take a quick break.

Neil Apatel

When we're back, Thomas and I get into the decoder questions, and we gear up to talk about the state of the EV market.

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Neil Apatel

We're back with Polestar CEO Thomas Ingelath to talk about how Polestar is structured today and how it's responding to changes in the EV market. Let me ask a couple more decoder questions, and then I want to. I want to talk about the EV market and how it's changed. Last time we spoke, you had about 1000 people. Earlier this year you did some cuts, about 15%.

Nilay Patel

But how big is Polestar now? We are around 2800 people, something like that. We are on the way to reach by the end of this year, 2500. That is the process that we are in. Yeah.

And how is Polestar structured? How have you organized the company? There is a big part of our organization here in Gothenburg with the central sales department. We have, of course, the headquarter, marketing, sitting here in the building. We have as well our quality and service.

Thomas Ingelath

All of that is here. The R and D is partly here, but a big part of our R and D, especially the one that is taking care of the aluminum architecture that the poster five and six is built on, is located in the UK. That's the bigger portion of R and D sits. Sits there in Coventry. I could almost say, no, that's it then, of course, we have 27 markets, and each market has, and I call it now, a small polestar market lead there.

And that's, and I hope I didn't forget or anything. That's about it. We have, of course, a little bit more of our quality people sitting next to the factories. That is, of course, something that we build up now slowly, with the car line up growing. But we take care mainly of what we call the attributes that make Polestar a polestar.

And that's our interface, where the customer touches and feels a car and let it come to the digital screens in the car, all the feeling that you have in driving a car. We really highly appreciate the car being a physical object, not just a digital device. So these two elements are very traditional. Chassis department, a very modern, high advanced digital interface, designer driven. We do, of course, all the app development that we need in house.

So that's the stuff that we take care of. What do we involve in ADAs technology and developing the autonomous drive functionality of a highway pilot with hands off? No, that's technology that we harvest from the group. So this is the key decoder question. I love asking this question of former designers in particular, because I get a lot of consultant type CEO's.

Nilay Patel

How do you make decisions? What is your process of making decisions? Even listening to you talk, it feels different than everybody else. Yeah, indeed. The background makes me take decisions, knowing that certain, a lot.

Thomas Ingelath

I would say almost most decisions you cannot take, you have to take without really having the proof on the paper. Otherwise it would be easy for anybody to take that decision. I mean, you have to, to a certain degree, take that risk of projecting what is going to happen in the future. Where is consumer taste going? That I had to learn as a designer very much to be very much on your own at the end of the day, whatever data you try to prove it with, but at the end of the day, it comes to you taking a judgment where it is going.

It is a very lonely decision when you make the proposal of which design to go for. And I think that's a very tough but very good school to become serious about taking such a decision and being aware of the responsibility that you take with that on yourself by making the call, oh, it's this, or is that design? And exactly like that, we have to take certain decisions when it comes to business models, when it comes to markets, yeah, you have to, of course, listen to a lot of stuff, but at the end of the day, it's clear you can't hide behind the rationale of a spreadsheet. You have to stand by the decision and be sometimes bold in making that lonely decision. And for a lot of reasons, Polestar is being perceived as a brand with a very, very strong identity and a very strong appearance.

Wherever you see it, touch it, feel it. Of course, for me, the biggest value that we create with this company is the brand value. This is the long lasting value that we create. Technology comes and goes, models comes and goes. What really in hundred years is what we will have created as a value, is the value of the brand.

And for that reason, and for that reason, when you ask me now, what is the frame where I take my decisions? And of course, for me, it is as well, always very relevant. How does the decision that I take now here do we go a or b? How does it reflect on our brand? How does that affect how our brand is perceived?

It is, for me, a very important element of making sure people identify with something that they perceive as an incredible brand. Desirability will be key for the purchase decision for our products. It is not the bread and butter car. It is not the economics of the car that make you buy a polestar. It is about the fascination and the desirability of the brand.

That's why a lot of the decisions that we take, we always have to think about as well. How does that reflect on our brand? I want to come to that because there's a lot embedded in that statement. Right. The desirability is why people buy cars.

Nilay Patel

That is, I don't think it's an unusual point of view for a car executive, but the conviction that you have in it is, I think, unusual. But to have a brand for 100 years, you need to sell a lot of cars. The market for EV's in particular needs to exist and overtake the market for ice vehicles. This is what you were talking about earlier. There was a furious rush to announce EV's, to announce plans for all EV lineups.

It's the consumers who didn't go along with the plan. The demand did not increase at the rate that everybody had projected. Was that just pandemic? Zero interest rate thinking that we can see how expensive teslas are and the infinite demand for teslas, we can have a piece of that. What did the car industry get wrong there?

Thomas Ingelath

Very much disagree that the consumer didn't go along well. The sales have not increased at the rate. I mean, I can look at car lots around me, the EV's are sitting. There now we can just simply discuss, okay, what speed of increase do you. I mean, the EV market is still growing.

How fast is it growing? That's the question. And then again, it's almost, I mean, sorry for putting it now into this picture, but it's almost like, you know, climate change deniers saying, hey, look, it has been for two days raining. So, my God, what do you expect? Why does everybody is worried about the temperature on earth increasing?

Just because you had one cold winter, that doesn't prove that climate change isn't existing. So that projection on what will happen in ten years. Yes, I'm very convinced that the EV market will gain market share year after year after year. Just because I'm so convinced that it is that much more pleasant to experience the driving an electric car. This is just purely from a product quality stand of point.

When I go back now and drive a combustion engine car, it is a disappointment because it feels like old technology. Then, rightfully, there is a question of how affordable are EV's. And of course, companies like Tesla BYD have now opened that door to actually make EV's affordable. Not maybe to the extent it all the way has to still go, but the trend is there that you actually see that EV's become very affordable. That is how Tesla actually moved away into a mass market kind of brand, very different to what our ambition is now.

For that reason, I'm. I will not say I'm relaxed, but I'm convinced that the EV market, of course, will grow and become the majority in its share between, you know, high strength gas and EV's. And now, let now presume for a second that I'm totally wrong here and that will not happen. Would that actually matter for what we are after with the Polestar brand, I would say no, because what we are now building here and doing is a premium performance electric car brand. And even if the mass market will stay on hybrid ice train cars, to me, it is so crystal clear that if you want to build a modern performance car, how would you do it otherwise than electric?

This technology is so much more power. It has so much more great prerequisite to actually build a high performing car. That's where I feel like in that corner, you have such an amazing offer to the customer. Charging speed is relevant, but that's increasing dramatically. Look at how the polestar three is already charging speed by is actually that much superior.

Just how over right the way till 70, 80%. You keep that very high speed. That's why I think technology really makes it great and fun to drive such a performance car. When you see how a two and a half ton polestar three performs like superb performance car, you don't feel the weight actually. It's the opposite.

That weight actually, together with the high torque of the engines, it is so low the weight that it actually gives you this almost go kart type of feeling. It's amazing how that actually works. Open the door with electromobility gives you such an amazing opportunity to build even greater performing cars. When we take into our comparison drives what was a hero of the performance ice train car. If we take that into our test, my God, it's always amazing.

Then you get into this ice train car, you rev it and there's an amazing noise, but nothing happens because acceleration in these cars feels so compared to all the spectacle of noise happening actually that low. Now that's where even from that aspect I'm not worried. Now putting the third perspective in it. I mean, Jesus, if we don't get onto the track of electrification, how the hell do we actually think that we manage the decarbonization? I mean that's the other thing.

And that is where I would really address politicians. You cannot be that short sighted that you lose the goal of decarbonization that much out of focus. And let's be clear for transportation what we are talking about, that the car that you and me drive, this is the easiest, simplest and most pleasant way of actually decarbonizing your own personal life. I mean, there are many more difficult areas flying around the world. How do you get decarbonization happening there?

These are difficult questions in terms of personal transport. With swiss cars at Unme drive, their decarbonization is very quickly possible. CO2 burden of a polestar has decreased so nicely. Yeah, 20 tons. Soon we will, I mean the polestar four comes with 20 ton CO2 burden.

That is something that you within, I don't know, 15,000, 20,000 km you're on, I call it now done with it. Then you driving an ice train would become worse than that. And from then on you actually have a CO2 free user phase. If you feed it with green energy. I mean that is actually a very doable and easy thing.

A lot of things in your life are much more difficult to decarbonize. And that, let's face it, that's a big challenge for the whole industry nations to get onto that track. Two things. One, I have done some very entertainingly irresponsible things in a polestar. Two, I agree with you, they are very fast.

Nilay Patel

And two, I think a lot of people are going to disagree with you about the value of that engine noise over time, but we'll leave that aside. You mentioned Tesla and it becoming a lower priced mass market car. Thats the thing. I think were looking at the same piece of evidence in two different ways. Im looking at Tesla rapidly slash the price of the model three over and over and over again.

So much so that theyre destabilizing other companies, theyre destabilizing Hertz, theyre destabilizing you. Prices of electric cars are coming down fast because Tesla is basically maintaining its sales levels by slashing prices. There's an argument that Tesla will get to the $25,000 EV. By just cutting the price of the model three three more times, they're already at $35,000. That's the piece of evidence I look at that says, okay, even the company that was far and away the biggest player in the global EV market is having to slash prices to maintain demand.

And it has major competition from Geely, from BYD, that is bringing the prices of market down. Is that to you, is that evidence that it's competition that's lowering prices? Is that evidence that consumers are no longer willing to pay the premium they were in the pandemic for cars? How are you seeing that play out for Polestar and in the market as a whole? It's a different ambition.

Thomas Ingelath

If you want to sell millions of cars, when you actually put out the goal of selling 20 million cars in a year, of course, then you have to be very aggressive in your pricing and you have to be very aggressive in gaining market share there. But that's a complete different target, a different game. Do you see Tesla struggle as an opportunity for Polestar to take share? Because there is a segment of the Tesla buyer that is right in the strike zone for Polestar? Well, that's, of course, where Tesla started was a complete different end.

I mean, they had cost for $100,000 out there. This is what I'm saying. And the Model S has not been refreshed in a long time. They leave them behind. That is clear.

That is where I indeed see a big opportunity for, for Polestar to address that clientele again. They moved into mass market and leaving that clear and tail from the beginning. High priced. Tesla's Model X, Model S. I definitely think that that is a very interesting alternative that PoLestar is offering to those customers.

Nilay Patel

Tesla in particular, design wise, the interior of the car, very minimalistic. The model three refresh. I think people like it. It's a very mild refresh. The reviews I've read of it so far say we really dislike this new control scheme.

I look at, they're pushing everything onto the screen. The interiors are very minimal. That seems to be where they're saving some cost. You've talked a lot about the user interface of the car, being in the car, experiencing the car. Is that the differentiation here, that you can build a better, more tactile experience in the car?

Thomas Ingelath

It's an acknowledgment. And it's not just a computer on wheels. We actually embrace and cherish some of the great traditions of Garcia. I mean, you mentioned now the noise that maybe might be controversial, but other things we actually agree a lot on a functioning steering wheel is a nice thing to have. But generally, that combination we like.

It is, of course, a computer, but it is not just a computer on wheels. It is a very emotional, physically moving thing. We saw that when we take the cars onto the ice track, where you very easily, even on low speed, see how cars behave, how you tune the car, and how that incredible power is in the car, how you make it controllable and nicely in doses, available to the driver. That's where that element of how this great technology is actually brought into that perfectly tuned masterpiece. That's this art of creating that really great car.

It's, in a way, a very traditional process in order to make that technology really well functioning, with great interaction, with great materials, with great love and attention to detail. That's where we are quite old fashioned in that respect, cherishing that element in it. Being a european brand, I think it comes somehow natural with the genes that we do it like that. But I see as well that we will be always in that discourse with ourselves. What is the stuff where we have to push the borders, where we have to be open to modern technology and not be blocked in tradition?

And where is the tradition actually very helpful in doing a great product, where I would still see us in the big bulk, very much on the innovation side. And when you see how much we have now, the task to make people understand that what we did with the virtual mirror is actually something really embracing modern technology to solve a problem that there was and give a really great answer, and that that is not just a tech gag, but something really providing progress. I think that's being established in the world of driving innovation, but at the same time, embracing that there are really good, great stuff in the art of building cars from the history. Somehow we have to convince on both sides heavily, we have to really be very good on both ends. And just as much convinced the traditional journalist who actually likes driving our cars, but thinks, oh, my God, this fancy idea of a virgin.

We have to convince them that that is actually great technology. And at the same time, we have to, of course, make sure that people understand that we are not just a scandinavian european brand that is slowly adapting electric technology, but that we actually have by now done an amount, for example, of over the air updates, which is, you know, it became supernatural for us. And it's almost unnoticed that how many over the air updates we do, that is where we are far, far ahead of almost all of the oems here in Europe. We actually have that technology edge already very much incorporated. Just, you know, just like Tesla, customers are used to over the updates.

That's definitely where Polestar is very much at the forefront of bringing this technology to customers. We need to take another quick break. When we're back, Thomas and I get into the in car experience and what that might look like in a future of increasing autonomy.

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Neil Apatel

We're back with Polestar CEO Thomas Ingelap to discuss his philosophy on using third party software in the car. So if you're listening to this, Thomas is sitting in front of a polestar three. The three is in production now, right? It's coming out in the summer. Yep.

Nilay Patel

If you look at the interior of upholsterer three, it is very minimal, and all of the controls have been moved to the screen. You are saying that the software and the screen, that's all stuff you take from the group, the advanced technology you take from the group, and you're doing a bunch of other engineering. What's the balance there? Because that, to me, seems like when you have a brand and your focus is so much on the brand and the experiences of the brand, and making the brand desirable, people get into cars, and over whatever many years, they're just going to open Google Maps in their center screen, tell the car where to go, and then play on their phones. And the experience of being in the car is going to diminish over time to almost a commodity.

I look at that screen, I look at the minimal interior here, and I see a big tablet in the middle of a polestar three, and I say, that thing is going to eat the rest of the car experience. It's going to turn all of these cars into just a thing you buy that drive you around. Is that a worry that you have? No, because I see this not happening in comparable industries. The Google Maps screen that you see in a car.

Thomas Ingelath

If what you said would be right, then any Apple iPhone user would not cherish their iPhone anymore. Because guess what I mean. The Google Maps is the Google maps. That's not the problem composing a car. It's hundreds of elements that make the brand experience in a car.

You do not have to invent everything yourself for you to offer an amazing product to the customer. It includes bringing elements in it that they actually love and cherish. And guess what? I mean, a lot of people love and cherish the navigation that is provided with a Google Maps system. And to have it that nicely and easy integrated and being really communicating right, great with the information that the car can deliver makes it so much more predicting the right stuff.

So that's really where we have to get over that hump. What makes a brand a brand? And where do you actually create a meal, a dish that is great for the customer? I always try to make it that way. A great chef in the kitchen.

You don't invent your own, your special vegetables. I mean, you know, they use the carrot, the onion. I mean, it is what everybody else is using as well. But you create a dish which is unique and amazing. And of course, that's how that element of a Google maps comes into our car.

Neil Apatel

So last June, you announced a joint venture with a chinese company called Xinji Meizu, also part of the Geely family. They have a platform called fly me. That's the software you're going to use in Polestar cars in China. Is that because you can't use Google services in China that you have to. Go to another provider?

Thomas Ingelath

No, I mean, that's not the reason why we do it. Not being able to use Google Maps is forever. For a long time the case in China, we did provide software so far in our cars that had that one navigation system. That's what we did always before, but we always composed then nevertheless, with the chinese elements and the chinese App Store, a software offer that, of course, at the end of the day is very much driven and decided with a very european mindset. And I think that is failing.

And the speed that we were able to do that with our own organization in China can't compete with the speed that you need in order to so very similar in a way how the entertainment system is now something that we do together with the gas system here we see, and it goes that step further that actually the whole phone experience is linked to the software of the car and that unit of phone car having exactly the same operating system and really making that a unique experience. Yes. That idea about going together with a mobile phone device company, Shinji Meizhou, them bringing their phone and that software on into the car and us delivering the car experience and melting that together, we believe that for the chinese customer, that experience will be that much more according to the needs and what they expect. When we did that then, and we had the corporation going. And for the polestar four is the first car that will have the Polestar OS.

Two days before Beijing Motor show, we will actually present that to a higher degree than to the public. I noticed that the discussion that we had, and of course, we monitored, hey, how are they doing now, this polestaros, which is indeed based on this fly me bass, and yes, I saw, oh, we were like, do you really want to do it like that? And naturally, we would have done a different hierarchy and kind of how the. How the interaction is laid out and do you. And naturally, for us, oh, shouldn't we reduce it and make it a bit more simple and clearer and less visually complex?

And it was interesting to see how our chinese partner there said, no, no, that's actually, I thought, yeah, that's exactly where we would have taken a different turn and would have probably done it in our very european way. And I think there was a language barrier as well that there is. I mean, it's so different characters and stuff. It's very difficult to do all this interface stuff. From you're describing to me, I think the central tension of the auto industry outside of the EV transition.

Nilay Patel

Who's going to own the user interface and ultimately, who's going to monetize that user interface? Right. You mentioned App Stores. I know that GM and other companies really want to develop App Stores and have recurring revenue and take 30% the way that Google and Apple do. Volvo CEO Jim Rowan was on the show recently.

He was talking about how that's a bad idea, and he wants to have recurring revenue in insurance programs and other ideas. There's all these ideas about how to basically get to phone levels of revenue inside the car. Instead of a single purchase, you have an ongoing series of purchases in the car, especially as a car start to drive themselves. Who is going to own that screen? Is attention that.

I think it's there. You can see it with different car makers in different ways. It's there in the industry. You can see it in the industry, but it hasn't boiled over. There's GM, which said, we're not going to do Carplay anymore.

We're all in on Google, and we're going to have our own App Store. And that will play out however it plays out. There's you. You said you're all in on CarPlay. You've talked on this show about how you don't think that is the central point of differentiation for a consumer, whether it's Google Maps or not.

I've heard it from other automakers. But if you hand over the user experience to another company and say the chinese market demands a different hierarchy of menus because that's what they want, it's a totally different operating system with different applications on the screen, a different approach to how we even organize a computer. And in this market, it's totally different. In yet another market, Apple's just going to take over and it's Carplay in every car. At some point, don't you lose something?

It feels like that's the tension the industry can't quite articulate, but certainly is feeling. And now it goes back to that question, who owns the owner? I mean, we don't. Nobody owns them. They're having their free decision.

Thomas Ingelath

If I. Let me give you an example, Spotify, would you take the whole car? Well, let me ask you much more specifically. Would you take Apple's Carplay that takes over every screen in the car and just let Apple's operating system run everything in the car? They've announced it.

Nilay Patel

They have two partners, but it doesn't seem to be shipping. You say everything. And there's the question is, what is everything? People thought as well that our gas system is the software in the car. And of course, by the way, just.

To clarify, gas is Google Automotive services. Yeah. Okay. Yeah. The majority of the software of the car is hidden in the background.

Thomas Ingelath

It is our software which is doing all the drivetrain, the safety, everything. I mean, that is where we really talk about this. But it's an important part. I will not take that away. It's very important because it's a customer.

Nilay Patel

But it's not the part of the car that has shopping buttons in it. It's not the part of the car where people can sign up for subscription services. That's the monetization that everyone's headed towards. Yeah, but do you think that we will make now big bucks with Spotify being in our App Store that that will now shift our revenue opportunity? That is that the customer can listen to their Spotify app in our car and their subscription that they have is Spotify that mainly makes our car at all a purchase in the purchase basket.

Thomas Ingelath

We should not kid ourselves how much we can develop apps and earn money on them. I mean, sorry. That is, the car industry is not good in developing entertainment apps like Spotify, streaming stuff. I mean, maybe at some point I don't think either that that is what Google and Apple makes them getting into that business. They are complete different opportunities.

A big great shift will be the experience of unsupervised piloting in a car. That moment you actually offer something to the customer which is beyond what they experienced so far. And I definitely think that that will open revenue streams for the car industry where you can open different doors. The other thing is how much you can keep your car alive and modern. I mean, today you purchase a car and we have clearly already today, not anymore.

The expectation that this car stays, the software and everything like it is, will always be the same. There will be opportunities actually to upgrade the car and not do it now totally for free. But there are certain functions and features that you can develop over time that you actually then of course have a new revenue stream by, for example, the unsupervised highway piloting. These are things where I think really the value added is where the companies, the car companies can actually develop into something more than just selling a car once, but actually having opportunities for an enhanced experience that you can charge for the stuff that we have in the App Store, in the Google system, what comes through, what fly me does bring you as an App Store experience. I would say these are tick in a box.

You have to be able for customers to. That they can access the music channels, the entertainment channels when they are charging that they're used to, so that they don't take out their phone and look at the stuff on their phone, but that they actually can look at it and the big screen that you have there. For me, this is naive to think that you could charge extra for them watching the stuff that they anyway can watch on your phone for them to be accessing that in the car. So let me ask you, Apple has the carplay where it takes over all the, not all the software. Would you do it?

Yeah, of course. Have you talked to me about it? Because I know that they're not taking over the car. It is a catered experience. Okay.

Then you have a certain interface that is more driven by Apple. I believe that we have to be proud enough and powerful enough thinking that we actually have a very competitive and great original experience that we do that together with the gas system. I'm not afraid of that competition. And it would be strange to prohibit our customers if they have that preference then. I mean, I had that experience in smaller scale.

I mean, I was always asking when I was driving actually in imposter two in the UK, and then the driver was actually running Waze. And I asked, why do you use Waze? And, okay, there are certain preferences. They are used to it. They like that.

That car app does this and this. Fine. If they want to have Waze, then run waze in our cars. And of course we should cater for them to be able to. Now we actually do it.

Nature. They don't have to do it through their phone anymore. Now that app is included and you can push the button and instead of the Google Maps, you run it on Waze. I really think we are here to provide to the customer that they can use a car. They want to use a car and not to be dogmatic about, oh, no, we don't offer that.

Nilay Patel

All right, I only have a few minutes left with you. You're a designer and I like asking about car design. 2021, you were on the show. It was the height of what I would call the angry robot era in car design, particularly from the japanese brands. And I asked you about BMW's nostrils.

I think that era has changed. We are into an interesting sort of retro future moment. That's Hyundai and Kia for sure, but the Rivian R three designs, particularly r three x, very retro future, very organic. What do you think is happening here? Is this consumer demand?

Is this just design trends? How are you thinking about it? It's the way it goes. It's history. It's history taking place.

Thomas Ingelath

I mean, car design is developing. It's according to society streams. It's always a reflection of what's happening in culture and society. And indeed, I see that as well. I actually applaud it.

I'm happy that we are out of this super aggressive. And then again, it's of course a reflection of the period where the whole world is in the danger that I see is, of course, that instead of developing new expressions and new formative elements that you are too much on, just reflecting what has happened in the past. That's of course, a tricky bit of making. Now that translation into come on. Okay, yes, we cherish a bit more certain historical values and, you know, great car design, but how do you drive it into the future?

How do you make it actually a modern trend and not just a retro trend, but, I mean, it's good and great creativity out there. It's fun by now, again, to actually go onto whatever car show is left and actually see what's happening there. And it's obvious that there is as well a certain, I call it now, unsecurity. On testing newground and trying, you know, you see how, for example, BMW is putting out a study of how their future direction can look like. But it's great that companies feel the need and the necessity to actually define and open that new epoch and actually enter it on the way of defining it.

Great. And partly it makes as well our story easier because certain elements that we have been promoting some years ago obviously find recognition in that and by that as well, kind of make it as well for the customer. Choosing our cars kind of a confirmation of the style that we are promoting is actually what is leading into the future. Do you see that turn towards retrofuturism or safer designs? It felt like EV's inspired a lot of companies to get as radical as possible because the packaging of the car was different.

Nilay Patel

You didn't have a transmission tunnel, you could do a frunk, you could do anything you want. The EV is just packaged inherently differently. There was a push towards radicalism. Some companies pushed very safely. The f 150.

Lightning is an f 150. Do you see that coming into a coherent place where it's like, okay, people just want the EV drivetrain and they want a cool car, or are we still in that? Actually, we can package the car entirely differently? No, it's a bit more sophisticated by now. It's not just ah, here's a bright white field, let's just run.

Thomas Ingelath

It has to make sense. I mean, putting meaning into it. That's certainly one element. The other element is that the recognition that it's not just enough to look futuristic. You still have to work on giving your brand profile.

So the face of the car just looking futuristic is not good enough. Guess what? There are 2050 cars out there by now that look futuristic. Just, you know, on first glance, by now you definitely have to be that much more sophisticated in crafting it and finding your expression of it. So that's where we definitely reached much more beyond that first wave.

We are definitely now in the time when, yes, clearly electric car design is driving the future of car design. I mean, guess what? We are talking about car design, which obviously. Would you discuss the future trend of hybrid cars? No, of course, there is this one trend of car design and it is very much influenced by electric cars.

And that's where we are now in that more sophisticated stage where that type of electric car design look, how does it now become that sophisticated, that brand expression, characters, different categories of cars actually find craftsmanship, their category, their catalog of expression. I definitely embrace that. We are beyond that. 1st 1st happiness about the car just looking futuristic. There's retrofuture, there's organic shapes, there's everybody calmed down.

Nilay Patel

Then there's the Cybertruck, which is an angry triangle. Does that represent anything to you, or is that just a design direction that you are interested in seeing what happens? Very iconic design and shape and stuff. Yeah, you can do that once, but it doesn't define a car line. I mean, that's where I don't see that that would start a new trend or whatever.

Thomas Ingelath

It's a very exotic, singular moment in car history, and for that reason, great. I embrace it. It's very brave and, of course, a technical challenge to do it, but aesthetically, it has its limitation in kind of what the doorstep would open. So for that reason, it's always amazing to see that car history is full of this individual moments. There has happened something which was amazingly outstanding, but in a way, it did not lead to much.

And that is where at the moment, I mean, Jesus asked me in two years, but at the moment, I can't see that that would lead to anything beyond that one single product. I think aesthetically, it has its limitations. As my new favorite response to things, I'm just going to hold onto that forever. All right, Thomas, this has been wonderful. Tell the people what's next for Polestar.

Nilay Patel

What should they be looking for? Well, three and four on the road. That will be, hopefully, an amazing experience to see these cars not just on the front of a magazine, but actually see it passing by. Because, let's face it, that's still one of the things I experienced that again and again. Whatever we try to visualize to it is only when you had the chance to see it on the road that you actually grasp the dimension of it and what it really does.

Thomas Ingelath

So that's, of course, very exciting, what people should expect from us. Definitely developing the element of performance in our brands. Stronger. And you know what? We started with the Beast edition of the BST edition of the Polestar two.

We want to, and I call it now, cheekily, that fun of having electric cars that have. Have that kind of culture of making it an automotive fun, desirable car. That element we want to embrace when we have pulsar. Three, four out, the five will come. And that's definitely.

I was in the prototype, actually, in Coventry last week. It's so amazing to see this car coming together. So 2025, this car then coming on the road. I think that completion of having then the range of two, three, four and five out, then you have a brand together, a brand polestar, how we always envisaged it in the first place. And I'm really looking forward for people to be able to see that on the road.

Nilay Patel

Polestar famously launched with the Polestar one, which was a hybrid, a very high performance hybrid, a GT. It's a cool car and you moved it with. Now your all Ev's. Hybrids are having a little bit of a resurgence here in the US. You can see the sales growth.

You can see politicians and carmakers are saying hybrids are the way because they solve the range anxiety problem. Would you ever do a hybrid again? I never say never. Having said that, technology is moving and we definitely would have to embrace innovation to a much bigger extent. And we cannot just do the hybrid as a hybrid as it was.

Thomas Ingelath

I believe as well. I went on that as, again, performance. If we want to do something like a polestar one with that performance, I mean, Jesus, that's where nothing beats electric power. It would be very difficult to do something that can compete with a pure electric performance car. So show me the tech that can be that and then we are talking.

Nilay Patel

Great. Well, Thomas, thank you so much for being on Decoder. I really appreciate it. Pleasure. And thanks a lot for the time.

You gave me here.

Neil Apatel

I'd like to thank Thomas for taking the time to join Decoder today and thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about the show, or really anything else, what you'd like us to cover, just thoughts. You can email us@decoderge.com. Dot we really do read all the emails and we love them.

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If you like Decoder, please share it with your friends. Subscribe wherever you get your podcast. Decoder is a production of the Verge and part of the Vox Media podcast network. Today's episode was produced by Kate Cox and Nick Stat. It was edited by Kelly Wright.

Our supervising producer is Liam James. The decoder music is by breakmaster Cylinder. We'll see you next time.