Volvo unveils new Polestar 1 electric vehicle under Car as a Service model
When people think of electric cars, Volvo may not be the first brand to come to mind. Indeed, the auto market in Hong Kong was completely taken by both the model S and X from Tesla until the Hong Kong government withdrew a tax break on electric vehicles (EVs). With sales of electric and hybrid cars stalling in the local market, what on earth could possibly bring consumers back? Enter Polestar 1; the new electric performance hybrid, and the Car as a Service (CaaS) model.
This new offering from Polestar, Volvo’s newly refocused performance-oriented brand, is sleek and engaging. Announced with a 2019 arrival date, the 600hp plug-in hybrid is the first of five new EVs planned for the market. Yet, these stylish new products are not the only new offering from the Scandinavian motoring giant. This week, Kwiksure discusses the Polestar 1, Volvo’s proposed CaaS “ownership” model, and what such an arrangement might mean for your car insurance.
Polestar’s bid for pole position in the EV market
A recent Wired article quoted Volvo CEO, Håkan Samuelsson, as saying “We want to be leaders in electrification”, and it’s causing a few to now wonder whether Volvo and Polestar have an EV lineup to truly test Tesla’s hold in the market. The Polestar 1, and its pure electric sequel the Polestar 2, are a stylish yet bold step in that direction. The 1 boasts an impressive 600hp and 1,000Nm (737 lb-ft) of torque while posing its real challenge to Tesla in its battery; an estimated range of 93 miles on a charge (making it the longest hybrid range in the market).
Under the hood, you’ll notice a carbon-fibre skin that grants Polestar 1 rigidity and weight savings. It has a deployable rear spoiler to assist with handling in high speeds, a dreamy leather interior, and a panoramic ceiling that curves into the rear windscreen. It’s a very, very beautiful machine, yet speaks to the investment commitment of Volvo and its Chinese owner, Zhejiang Geely Holding Group. Polestar has had USD 755 million pledged to help develop the company.
In addition to shaking up the EV market through its Polestar products, the car manufacturer is pushing digitization in its purchasing and ownership model; through Car as a Service. When the Polestar 1 rolls out in markets through mid-2019 (no Hong Kong import date is expected, yet), hopeful drivers will be able to “acquire” theirs through a two-to-three year online subscription. Confused? Let us explain.
The Car as a Service model: leasing, rather than buying
While the concept of leasing a car is not new, the Car as a Service model has already begun changing the way we think about car ownership. The traditional Car as a Product (CaaP) model saw manufacturers relinquish ownership of their vehicle as soon as an individual paid the purchase price at a dealership. Instead, the CaaS model borrows heavily from the tech industry's popular 'as a Service' subscription trend. With CaaS, manufacturers retain ownership of the vehicles they produce and will lease the use of their cars to drivers on a periodic, subscription-based arrangement.
Traditional car-leasing arrangements allowed a driver to take temporary possession of a specific vehicle until the date of the lease expiry arrived. CaaS is heading in a different direction. With the announcement of the CaaS model for the 1, Polestar and Volvo are embarking on an industry-leading path towards common vehicle-sharing arrangements; the new “Phone-As-Key” (PAK) technology enables a range of vehicle concierge and sharing services:
- Drivers can send their PAK access to friends via a phone app, allowing them to access and drive your vehicle - even if you’re out of the country
- PAK allows drivers to grant access to a third-party concierge who can pick up and deliver your vehicle to you when you end up away from it, collect and charge/refuel your vehicle for you while you work, or even take your vehicle for maintenance and service
- The Polestar subscription service can also allow you to access vehicles in locations other than where your main car is located, perfect for securing transport when travelling for work or holiday
The move to a more enhanced CaaS model is part of Polestar's move towards focusing the driving experience on driving, as opposed to car ownership. While they’ll push for more online interaction with their brand, physical dealerships will exist to support and supplement the CaaS model. In fact, drivers can order test drives from the Polestar phone app, meaning drivers may never need to visit a dealership unless they truly want to.
What could the CaaS model mean for Hong Kong drivers?
In Hong Kong, the most common form of CaaS you’ll encounter is ridesharing apps like Uber. That said, the city could be a prime candidate for more enhanced forms of Car as a Service. Hong Kongers are notoriously quick adopters of the latest technological trends, and the often costly expenses that come with owning a car in the SAR could be reduced under vehicle-sharing arrangements.
Similarly, the local market showed that it is more than happy to choose an EV over a traditional gasoline vehicle, so upcoming products such as the Polestar 1 could be quite popular here; the immediate problem is whether or not the government will reconsider the wildly popular tax break they introduced to curb purchases of environmentally unsustainable vehicles. If the Polestar vehicles and their CaaS offers become available in Hong Kong, insurance will be the next biggest challenge for the manufacturer and their subscribers.
How might Hong Kong car insurance work with a CaaS arrangement?
Luckily for us, there are already similar products and services in place in Hong Kong. Carshare.hk works like Airbnb for vehicle rental, and is accessible through the Carshare App on a smartphone. Car owners list their vehicles, like holiday homes, and you have the opportunity to search for a specific type of car-dependent on your needs. When the hirage is confirmed, you select a pickup and rental time with the car owner.
Insurance with Carshare is said to have an insurance policy through a local provider, and the insurance premiums themselves are paid through your rental fees. We’re not 100% sure on the details, so our advice in becoming a Carshare user would be to ask the owner or company for a copy of their insurance policy to be aware of your liability and insurance coverage as a third party, and/or contact the insurer directly.
Our understanding, however, is that the Carshare insurance arrangement is not unlike the policies held by rental car businesses, such as Hertz or Avis. This could be to the advantage of future Car as a Service models, such as Polestar’s, should they seek to expand further into Asia.
Find out more about car insurance in Hong Kong
With Hong Kong’s mandatory car insurance laws, there can be a lot to get your head around. That’s why we remain committed to providing helpful and informative content on vehicle insurance, motoring news, and local regulations on a regular basis. If you’d like to know more about the benefits of owning an electric car, the comprehensive and third party insurance options available in HK, or simply want to read about being a motorist in Hong Kong, keep an eye on our blog for all your Hong Kong driving needs.