Polestar’s CEO has identified a major flaw in the EV market—and it’s bad news for customers who have already bought in
It’s a common notion that when a customer drives their shiny new car off a dealer’s lot, the value of the vehicle automatically goes down. And this is the problem EV disrupter Polestar is currently facing—and trying to outmaneuver, via changes to its big EV deal with Hertz.
Car resale values are often turbulent, but in a fast-evolving sector like electric motors—buffeted by price competition, supply issues, and questions over long-term feasibility—that turbulence is all the more pronounced. According to a 2023 study of 1.1 million motors by iSeeCars.com, electric vehicles on average have lost 49.1% of their value over the past five years.
And this is where a deal between Volvo spinoff Polestar and rental giant Hertz has come somewhat unstuck. In an interview with the Financial Times Polestar’s CEO, Thomas Ingenlath, confirmed the business has agreed to suspend a purchasing agreement originally planned to last until 2027.
In 2022 Hertz signed a deal with both Polestar and Elon Musk’s Tesla to buy tens of thousands of cars to fulfill its pledge of having 25% of its fleet go electric. The deal for 65,000 Polestars was estimated to be worth approximately $3 billion, while Hertz’s deal with Tesla was for 100,000 vehicles.
