Alexander Lutz, Managing Director Polestar Deutschland

Alexander Lutz (pictured right): "We want to build a climate-neutral electric car by 2030."

| VDE
2022-03-24 expert contribution

The world in 2030: quiet, beautiful, electric

Car stats like horsepower and acceleration will soon lose their significance in tomorrow’s world of e-mobility. Alexander Lutz, Managing Director of Polestar Germany, explains in an interview with Dr. Ralf Petri, Head of Mobility at VDE, how driving can be both fun and sustainable.

VDE: Mr. Lutz, you’re currently Managing Director of Polestar in Germany. So to start things off, what kind of car do you drive outside work?

Alexander Lutz: A Polestar 2 with the Performance pack and power upgrade.


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Dr. Ralf Petri

VDE: Your career has included stints at Audi and Maserati, among others – automotive companies that are more at home in the conventional combustion world. What did you find particularly exciting about Polestar?

Alexander Lutz: It was chiefly my own personal motivation to make a difference. I first came into contact with Polestar in 2018 at the Geneva International Motor Show. Even then, I already thought that the Polestar 1 was one of the most beautiful cars in the world. I had never heard of the brand as a manufacturer, though. That’s when I met the first people from Polestar and learned more about the company’s grand visions: sustainability combined with performance and direct-to-consumer business via online sales. This strategy, combined with a CEO like Thomas Ingenlath, was the main reason for me to join Polestar.

VDE: Can you tell us more about Polestar? It’s a joint venture between Geely and Volvo, for one thing, but it’s also an internal vehicle tuner. What are the specific differences between Polestar and Volvo’s electric vehicles?

Alexander Lutz: Polestar sets itself apart from Volvo with a clear mission. I don’t know of any company in the automotive sector that focuses so clearly on sustainability – without neglecting driving pleasure. We’ve set ourselves goals that are unique in the industry. To name a few key points: our sales are 100 percent online. That’s our starting point. Other manufacturers have plenty to do to achieve that. We sell 100 percent electric vehicles. We aim for 100 percent sustainability. Nothing about this vision is going to change. Our Polestar 0 project – which aims to launch a completely emission-free car without offsetting [of CO2 emissions through climate projects] by 2030 – is a moonshot goal. This sets Polestar apart from its competitors. And another point that’s very important to our company is transparency. Being honest with ourselves, but also with the public. This principle pays off on the sustainability front.

VDE: The last time I was at a Volvo dealership, the salespeople told me that the Volvo XC 90, an all-electric car, is sold through direct sales. What does this mean for the Polestar brand? Surely there must be some cannibalization within the corporate group?

Alexander Lutz: That may be the case in a small area, yes. Based on the data we’ve collected so far, though, there’s been only a very small cannibalization effect within the Group. We will continue to set ourselves apart from Volvo. Our design language was still similar to that of Volvo at first, and it’s visually apparent that the brands are related. In the future, however, it will be increasingly easy to see the delineation between the brands and how they differ. Volvo has a more familiar, inclusive design language, and they’re oriented toward high sales volumes. Whereas we at Polestar are much more progressive, more focused on performance and much more exclusive in terms of the number of units.

VDE: How do you take advantage of synergies with the Volvo Group, such as in vehicle development? Or is Polestar completely independent? 

Alexander Lutz: We’re definitely harnessing the synergies. That’s one of the great advantages of a corporate group. And it’s not just Volvo, but also Geely. Geely’s plants, the existing vehicle platforms and the high quality that’s already been proven in millions of vehicles – we also benefit from all that. The Polestar 2 CMA (Compact Modular Architecture) platform has been acquired by Renault, Nissan and Mitsubishi because it works so well during assembly. We wouldn’t have these synergies without Geely and Volvo.

VDE: I see several challenges at Polestar such as the different mentalities of a Swedish company and a Chinese company. Germany’s sales market is also not an easy one to conquer. How are you dealing with all these challenges while ensuring that a great product comes out in the end?

Alexander Lutz: We have the great advantage that the cars we’re currently building and those we built in the past don’t target different customer structures in marketing and sales, which has been the case for the traditional automotive industry so far. In other words, the company’s goals were the main focus of vehicle production. Of course, we also draw on customer feedback to continuously improve ourselves. Most of all, though, we want the Polestar brand to stand for something that hasn’t been done before. The company’s sustainability goals are part of our development.
Of course, as you mentioned, there are also differences in mentality between the Swedish and Chinese cultures. We find that it helps to explore the extremes, such as the issue of working time. We are ultimately helping both cultures in the Group to find the right balance. Volvo’s experience and quality are naturally more pronounced due to its history. But in the end, Geely and Volvo’s values are united in the Polestar 2 and, later, in the Polestar 3. And without these different perspectives, we couldn’t have built such good products.
The German market has a certain pioneering role. German customers appreciate attention to detail, for instance. We’re a nation of motorists who want the highest quality. We relay information like this back to Sweden. This input is then channeled into improvements in development at headquarters in Gothenburg. And we can implement the improvements quickly, since the processes in a startup are simply more dynamic.

VDE: How many employees does Polestar have globally?

Alexander Lutz: We’re still expanding rapidly. Here at the Cologne location, we’re set to have almost 100 people by the end of the year. Polestar has more than 1,800 employees worldwide.

Alexander Lutz, Managing Director Polestar Deutschland

Alexander Lutz (pictured left): "Charging electric vehicles will be become noticeably easier over the next three years."

| VDE

VDE: Let’s circle back to sustainability, recycling and climate protection. You mentioned the Polestar 0 project – what does it entail? What’s special about it?

Alexander Lutz: The distinguishing feature and unique selling point of the Polestar 0 project is that we want to build a climate-neutral car by 2030, while other manufacturers aim to achieve 50-percent electrification of their fleet in the same time. Those are two completely different objectives. It’s like if you wanted to run the 100-meter dash in nine seconds, but everyone else is currently running it in around 18 seconds.

VDE: Can you give us more insight into Polestar’s sustainability strategy?

Alexander Lutz: As the Managing Director for Germany, I can only speak for the areas that I’m in charge of and control. In principle, we try to keep our vehicles within our system or loop. The key term here is “circular economy”. The used car trade is conducted on our platforms, as far as possible. The value chain should also remain in our control. The most important factor there is the battery, which is a focus of our recycling efforts. We have the advantage of being an agile and fast startup, and we need to make the most of that. We can also monitor the cars that we’re now putting on the market. In contrast, manufacturers with hundreds of thousands of cars on the road have a much harder time getting their vehicles back in the shop. And we’re working with a special network of partners including ZF and SSAB who, like us, are also focusing on the topic of sustainability.

VDE: On the issue of batteries, there are also critics who denounce problems such as child labor or environmental pollution. Polestar wants to be completely sustainable. How can these two concerns be reconciled?

Alexander Lutz: We have yet to fully answer many questions in this area. But that’s precisely why I find the path Polestar is taking so courageous. With our LCA (Life Cycle Assessment), we show the methodology and how many CO2 emissions are produced in the production of a Polestar 2 – up to the end of the life cycle after about 200,000 kilometers. This is our way of creating transparency. Another facet is our partnership with Circulor, where we track materials via blockchain. We’re open about the fact that we’re not yet where we want to be. We currently emit approximately 27 tons of CO2 with each new Polestar 2 (standard range single-motor version), assuming we have a completely renewable energy mix. That’s part of being honest.

VDE: As everyone knows, electric vehicles also depend on the charging infrastructure. The filling process with a combustion engine is a little more self-sufficient, since the process isn’t so complex. Customers in Germany are hesitant to buy electric vehicles because of the charging infrastructure. What challenges and possible solutions do you see here?

Alexander Lutz: Yes, the charging infrastructure needs to catch up. We can observe new vehicle registrations and the expansion of the charging infrastructure diverging from each other a bit. All in all – and by that I mean both public charging stations and ones at home and at workplaces – the overall picture is somewhat more positive. There are certainly also negative examples like the rapid chargers on the A5 highway, which are never free. 
But generally, 85% of the time, vehicles will usually be charged at home or at work. How often do you have to find a public charging station as a driver of an F-category vehicle – maybe ten to twelve times a year? Germany is already reasonably well-positioned in terms of charging infrastructure, at least that’s what we hear from our customers. This will fundamentally require a change of thinking as long as the charging infrastructure network for electric cars is not so dense in Germany. For longer distances, you have to plan in advance using Google. You charge when you can rather than when you need to.

VDE: What is your position as a manufacturer on charging technology? What is Polestar betting on?

Alexander Lutz: Of the various charging technologies, inductive charging is certainly interesting and will be relevant in the future. The big advantage over hydrogen, gasoline and diesel is that transferring the energy via electricity does not require a physical connection to the car. But there’s obviously a difference between charging a telephone or a car inductively. Nevertheless, the US and Sweden are already performing the first tests with inductive charging stations to see how well it works in practice. Initial results show a good level of efficiency and safety. Of course, we can’t charge inductively across the board right now, but I don’t want to rule that out for the future.
We generally rely on an operating voltage of 400 volts, as with the Polestar 2. In the vehicle classes we’re working with, we can achieve good results with 400 volts. However, I don’t want to rule out that we might be able to make an even higher operating voltage possible in the future. With a capacity of 155 kW for the Polestar 2, we already have a better charging speed than most of the competition.
But I also believe that automated charging will come at some point. Within the next three years, it’s conceivable that you’ll leave your electric cars in a parking garage, and then the car will drive to the charging station and be charged independently – whether inductively or via a charging robot. So things will certainly get simpler for the customer. That’s progress.

Alexander Lutz, Managing Director Polestar Deutschland

Alexander Lutz (pictured right) explains Polestar’s sustainability strategy in our interview.

| VDE

VDE: What role do software and connectivity play at Polestar, or is the focus more on performance? We noticed that around a hundred technical experts are currently being sought in Gothenburg. Can you tell us more about which job profiles you’re currently looking for?

Alexander Lutz: Fun behind the wheel, the feeling of being involved and a nice driving experience – these emotions are very important to us. That will continue to be the case in the future. Although the car will eventually be able to drive itself, the pleasure of driving cannot be neglected. We have just the expertise for this thanks to our background in tuning. It’s also clear, however, that the automotive industry is developing towards a future in which emotions are less important. So we’re in an exclusive club with our vehicles, which do ensure a fun driving experience. One German manufacturer who does this quite well is a real perfectionist and begins with the letter P.
Regardless of the competition, we’ll continue to deliver our range of products to our customers and to focus on the hardware. The software is playing an increasingly important role, though. When it comes to vehicle electronics, the most important factor is the haptics – that is, the feel of operating the vehicle via the software. We’re already on a good footing in terms of hardware, but there are software possibilities we haven’t taken advantage of yet. That’s why we’re looking to hire more people here in Gothenburg. We’re also working with first-class partners, such as Google, to provide infotainment in our vehicles. We’re concentrating on building a car that children will want to have as a toy one day.

VDE: Is Polestar also affected by the shortage of skilled workers – especially relating to connectivity – or have you not had any issues there?

Alexander Lutz: We need fewer professionals in this field thanks to our close partnership with Google. That means we can also be more selective in our hiring. Additionally, Gothenburg and Stockholm are locations that attract smart, young developers. And at the end of the day, we’re Polestar. We have a very good reputation as a startup. We’re a place where developers can change things and personally help shape the direction of the company, regardless of whether you start as a C++ basic developer or as a software manager. Polestar offers an environment where you can see and touch what you’ve created. Employees take on a lot of responsibility and create progress. And to be perfectly honest, I don’t see that in the competition.

VDE: Speaking of competition, who are Polestar’s main competitors?

Alexander Lutz: Globally, it’s Tesla and Porsche. In the German market, we’ve observed that many customers of the premium German manufacturers (BMW, Audi and Mercedes) are also interested in and buy Polestar vehicles. We overlap with Tesla as far as the focus on electric vehicles and direct sales. And Porsche, like us, is an emotionally driven performance brand.

VDE: Before the pandemic, a number of e-mobility startups were founded at lightning speed and disappeared from the scene just as quickly. What are you doing differently to ensure that Polestar doesn’t suffer a similar fate?

Alexander Lutz: We’re seeing an incredibly dynamic market environment at the moment. Our unique selling point is that we draw strengths from our larger corporate group. A good example of this is our 200 service dealers in Germany. We have dealers who’ve been working with Volvo for over 40 years. How many startups can already boast such a premium service network? And Geely gives us the freedom to try things out and test things. For example, we’re not bound to Volvo’s 180-km/h speed limit. All these things, backed up with the necessary funding, make us very different than many other e-mobility startups. I don’t know anyone who hasn’t underestimated the cost of getting a vehicle on the road. It’s a difficult, capital-intensive process. We have extreme advantages thanks to Volvo and Geely, and we benefit from their experience. Even if you have a direct-to-customer business model, it is and remains extremely difficult. It’s not just a click on a website. A car is an emotional product and probably the second largest investment in people’s lives. It takes a lot of resources, time and money. Some startups simply underestimate the enormous effort involved.

VDE: Do hydrogen and fuel cells play a role for you, or are you solely concerned with batteries?

Alexander Lutz: E-mobility is the path we’ve chosen, and we’re sticking to it. The manufacturers who are still focusing on hydrogen haven’t even sold a combined total of 100,000 cars worldwide. By comparison, as a startup e-mobility manufacturer, we sold 29,000 cars last year. We’re convinced that e-mobility is the future. In time, e-mobility will prove to be the right way to go.

VDE: What will be the state of e-mobility in Germany in 2030?

Alexander Lutz: We assume there will be 48 million cars on the road in Germany, and I estimate that we can potentially ensure that 10 million of them are pure battery electric vehicles (BEV). Car stats such as horsepower or acceleration rate will not be as important anymore. It’s going to be all about design and connectivity and how well my vehicle fits into my life. In 2030, most people will choose to drive electric cars because it will be the easiest way to get from A to B. The combustion engine will certainly still exist in Germany, but only in very exclusive contexts – such as motor sports.
2030 will bring us a quiet, beautiful electromobility world in which charging and battery capacity simply aren’t topics of discussion anymore.