Electric cars are all the rage—but people haven’t been buying quite as many of them as auto companies like Tesla had hoped, especially in recent months. There are many things to blame for this, and high interest rates hiking up loan payments for buyers, is prime among them.
Seeing the lukewarm uptake of EVs, automakers—especially the ones who also make traditional combustion engine cars, such as Mercedes Benz, Ford and Aston Martin—decided to pull the brakes on EV production till consumers are ready to buy them again.
The only problem? These rivals risk missing a closing window of opportunity that could turn in their favor anytime, according to Thomas Ingenlath, the CEO of Swedish EV maker Polestar.
“There’s an incredible threat and danger if you don’t embrace future innovation and believe in that technology—the electric drivetrains, the innovation in battery, the innovation in modern electronics and software,” Ingenlath told The Telegraph in comments published Saturday.
“If you don’t participate in that and think you can wait, and customers are ready for it, it’s an incredible trap.”
Delaying production might be a losing strategy for some players in the EV market, but Polestar could benefit massively from it. Ingenlath said the company hasn’t really been impacted as much by a slump in demand, seeing as the Polestar 3 and 4 are sought-after cars (Polestar 5 is also set to debut later this year).
“It’s an incredible opportunity for Polestar that, in that sector of premium performance cars, there is indeed not that much competition coming,” he said.
Ingenlath’s comments come just days after Sweden-based automaker Volvo Car dumped a large chunk of its stake in Polestar owing to its financial woes and poor demand for EVs.
The Swedish Tesla rival has been loss-making for the last few years—a trend commonly seen among EV upstarts—and the so-called EV winter caused by plunging electric car sales hasn’t helped Polestar, which recently received a $1 billion funding package from a group of banks to keep it afloat.
The Nasdaq-listed Polestar, whose cars are priced higher relative to Teslas, cut a deal with second hand car retailer Hertz to ensure its cars aren’t sold for very cheap or in high quantities. The carmaker is still confident about the EV market’s rebound which can prop up its sales.
Representatives at Polestar didn’t immediately return Fortune’s request for comment.
Fear’s part in postponing EV purchases
The Polestar CEO’s read on floundering EV demand is simple—it’s not necessarily economic pressures holding people back from buying electric cars. It’s actually their fear of changing from fossil fuel-powered cars.
“To tell you the truth, I think that [it is about] being open for innovation and the future technology,” Ingenlath said of the trend causing the EV sales slump.
“I see far too many people hesitating with that and being scared of change. That is just not a good recipe for the future.”
Ingenlath isn’t totally wrong—people are not ready to switch up as they keep a look out for impending tech upgrades—but the lack of cheaper models is also a reason weighing on their decision.
Other big-name auto companies have been skittish in the current EV environment, with Ford saying it will scale back production of one of its marquee EVs.
Citing fledgling demand as the reason, luxury car company Aston Martin has put a pause on its first battery electric cars till demand picks up in 2026, while Germany’s Mercedes Benz has also revised its milestone to achieve its sales goal of 50% all-electric cars to 2030 from 2025.
Mercedes’s CEO Ola Källenius thinks it could be “many years” before the cost of making EVs and combustion engine cars equalize.
