Why Polestar UK tore up the Tesla sales playbook

Polestar makes premium electric vehicles with top-of-the-range models selling for around £100,000. It sees its rivals as BMW and Mercedes, as much as Tesla, though it also makes cheaper models.

The EV market is quickly growing in the UK thanks to government regulation designed to help us meet climate goals. According to the Zero Emission Vehicle (ZEV) mandates, 33 per cent of car sales must be electric this year, ramping up to 80 per cent by 2030 and 100 per cent by 2035. There are fines for those who don’t hit the targets.

This has stimulated sales, but consumers still have concerns about going electric because of issues like battery charging. Government intervention has stoked competition amongst manufacturers and second-hand car dealers alike.

Polestar is a Swedish company that grew out of a touring car racing team. It is part-owned by Volvo and Chinese company Geely Holding Group.

The EV market has particular challenges, but Matt Galvin has four pieces of advice that could help businesses in many sectors.

1. Don’t be afraid to replan your route to the market

When he became MD of Polestar UK in 2024, it was running what's known as a full agency model. So although you could find Polestar cars in dealerships, the dealers weren't actually selling anything. They were showing the cars to customers, but not transacting because this was still done by Polestar centrally, Galvin explains. The dealer was, according to Galvin, “the library" or “the test-drive facilitator”.

This model has been used by Tesla and gives the manufacturer total control over pricing, the customer relationship and brand experience, while avoiding discounting wars between dealers. But the trade-off is that you're not using the dealer for the one thing they're genuinely good at, Galvin realised, which is persuading people to buy.

One of his first actions as leader was to switch to an active sales model, where dealers are paid commission. This had “an instant impact on sales”, he says. His reasoning was that to compete in a crowded market he needed a stronger relationship with his retailers.

The lesson is to think carefully about your commercial model when it comes to partners. Sometimes they may be underperforming simply because that incentive structure isn’t right. Direct-to-consumer is a popular route to market in the digital age, but for a highly considered, expensive purchase like a premium car, it may present a false economy. The middleman can earn his keep.

2. Double down on customer service

“Twelve months ago we were very poor, it's fair to say, in our customer service scores,” admits Galvin. He made it his priority as leader to turn this around.

He has doubled the size of the customer service team, but he’s clear that investment alone wasn’t enough to solve the problem. Alongside the headcount, the mentality and culture had to change too.

He developed a simple mantra to focus the team: “Everything stops for a deal and everything stops for a customer”. When a customer has a problem, that becomes the number one job.

Customer service is important in all businesses, but maybe especially so in the EV industry right now. Modern cars and especially EVs are “computers on wheels”, says Galvin, compared to “legacy cars”.

They represent a very different user experience, with features like push-button ignition, tablet dashboards, button-operated handbrakes and even video-powered rearview mirrors (which aren’t mirrors at all!)

Customers can feel a bit overwhelmed and intimidated. They need reassurance that if things don’t work, they will be supported.

The standard one-hour handover expected people to absorb "an encyclopaedia's worth of information", Galvin realised. So he redesigned Polestar's service, inviting customers back for follow-up handovers and encouraging them to call in with questions, treating ongoing education as a service function rather than a cost to be minimised.

A key lesson is that a service turnaround is as much about culture and a clear, memorable operating priority as it is about investment in staffing levels.

3. Find common ground with competitors

A “mental barrier” for many customers who are thinking about switching to an EV is the practicality and cost of charging. Around 60 per cent of households in the UK have their own private driveway, Galvin points out. They can easily charge from their domestic electricity supply, benefiting not only from cheap night-time tariffs, but also the small 5 per cent VAT charge on domestic supply.

By contrast, the other 40 per cent in society need to consider on-street charging, which carries the full 20 per cent VAT tariff. Galvin is building industry-wide support to try and lower VAT for on-street charging and he says Chancellor Rachel Reeves is listening.

While Tesla is a rival for customers these days, Galvin acknowledges respect for what the company has done for his industry. “Tesla for sure were pioneers in the EV industry. You know, without Tesla, we wouldn't be where we are now on an electric car journey.”

4. Deploy AI intelligently for staff and customers

Sometimes businesses can suffer because different departments, or indeed individual employees, are using different AI providers. Galvin has rolled out Microsoft Copilot across the business. Teams use it to do tasks like assess pitches coming in from potential new suppliers, for example.

“One of the things we've learned as a business is that it's about how you instruct AI and how you talk to AI to get the best results,” says Galvin. “Because if you use the wrong commands and the wrong terminology, you're probably going to get the wrong result. A lot of the manual spreadsheet work that dogs this industry is now being done by AI.”

Galvin announces quarterly AI Champions to spotlight staff who are using the technology effectively. “Certainly AI from my perspective is not going to replace people,” says Galvin, “but someone who can use AI might replace somebody who can't.”

In terms of the customer's experience of AI, Polestar is partnering with Google Gemini for an agentic experience in its vehicles. Agents will be able to choose and book a restaurant for you while you drive through town, for example, says Galvin.

Chatting to an AI agent is arguably more natural in the privacy of your car where you are “king of your castle”, says Galvin, in contrast to public places.