Polestar ramps up battle with Tesla in China

Tesla could face stiffer competition in the world’s biggest car market.

Local champions are gearing up to take it on in China.

Reuters sources say luxury electric vehicle brand Polestar - owned by Chinese automaker Geely - is planning a big expansion of its sales network.

Right now it has just one showroom there, in Beijing.

Now 20 are planned, with most opening in the third quarter of this year.

Like Tesla, it plans to sell direct to customers, not through third-party dealers.

That means an upfront cost developing showrooms.

But gives it more control over retail prices.

Based in Sweden, Polestar is closely associated with Geely-owned Volvo.

It started producing sedans earlier this year in China, and will export them to Europe and the U.S.

Right now Tesla has over 50 showrooms in the country.

And Polestar isn’t its only competition.

Rival Xpeng plans to have about 200 outlets by the end of the year.

And with backing from online commerce giant Alibaba it’s got the financial firepower to compete.

Meanwhile China’s government wants 25% of all domestic car sales to be electric vehicles by 2025.

That leaves a lot to play for.