‘Busan plant is key to our North America strategy,’ says Polestar CEO

Polestar, the Swedish electric vehicle manufacturer, is poised to leverage its Busan plant into a strategic export base to North America, marking a broader push to diversify its once China-heavy supply chain.

“We’re focusing on Europe, North America and Asia, and within this three-pillar approach … this Busan factory is of highest importance, especially because of its link to North America,” said Polestar CEO Michael Lohscheller during a group interview at Polestar Seoul in Yongsan, Seoul, on Thursday.

Since September, Polestar has been pilot-producing the Polestar 4 mid-size SUV at Renault Korea’s Busan plant through a contract-manufacturing arrangement. These vehicles are intended for the North American market, which until now had been supplied by Polestar’s plant in China. That route, however, is no longer viable as the US has imposed tariffs of up to 245 percent on Chinese-made EVs, compared to just 15 percent on Korean automobiles.

“Two weeks ago, I was just in Canada myself and saw the first Polestar 4 arriving there (from Busan),” added Lohscheller, underscoring the growing strategic significance of the Busan facility as the starting point of Polestar’s global supply chain.

As an independent EV brand backed by its two major shareholders, Volvo Cars and China’s Geely, Polestar already leverages Volvo’s manufacturing presence in the US. Its two-track strategy for North America will therefore combine production at Volvo’s US facility with exports from its Busan plant in Korea.

Polestar is also strengthening ties with Korean battery manufacturers as part of its efforts to localize the supply chain. The Polestar 2 sedan, launched in Korea in 2022, used battery cells from both LG Energy Solution and China’s CATL. For its new high-end Polestar 5 sports car, set to debut next year, the Swedish EV maker has partnered with SK On.

While Korea’s EV market is intensely competitive -- led by Hyundai Motor Group and joined by carmakers such as Mercedes-Benz, BMW and Volvo, as well as Tesla -- Lohscheller highlighted Polestar, a relatively younger brand established in 2017, positioning itself as a fresh, premium brand aimed at a younger generation.

“The positioning of the Polestar brand really is design, performance and sustainability -- which is very relevant, in particular, for younger people … who want to make sure they do the right things in terms of emission-free mobility but also really enjoy a good-looking car, which is fun to drive,” said Lohscheller.

Polestar plans to introduce the large-sized Polestar 3 SUV in Korea next year, completing its three-vehicle lineup of the Polestar 3, 4 and 5.

“Polestar 5 and Polestar 3 are very high-end, premium vehicles that will strengthen our brand a lot,” said Lohscheller. “I think the basis is really the Polestar 4, which is doing exceptionally well. We’re seeing strong growth … and these two products, which are even above the Polestar 4 in terms of pricing and performance, will give us a bigger boost (in Korea).”

According to Lohscheller, although he did not disclose exact figures, combined sales of the Polestar 2 and Polestar 4 in Korea surged by roughly 251 percent from January to November compared to the same period last year, driven largely by the strong performance of the Polestar 4.

While Polestar does not operate its own service centers in Korea, Lohscheller stressed that customers can access a full range of services through Volvo’s 39 service centers nationwide.

Regarding Polestar’s delisting risk on the Nasdaq -- following a warning issued after its share price fell below the $1 minimum bid requirement, as reported by Reuters on Oct. 31 -- Lohscheller said the notice was “merely administrative” and had “no impact on business operations.”

“Polestar remains focused on long-term trust and stability,” he added. “We continue to execute on our plans, making sure we increase the number of retail locations, launching our very successful projects and further strengthening our relationship with Volvo.”