Polestar is making waves in the electric vehicle market by offering a $20,000 incentive for Tesla owners looking to switch to their new Polestar 3 electric SUV.

This substantial incentive, which includes a $5,000 Polestar Conquest Bonus and up to $15,000 in additional discounts, aims to attract Tesla drivers amid growing dissatisfaction with the brand.

Polestar's strategy comes at a time when Tesla is facing scrutiny and declining sales, particularly due to negative equity issues affecting owners of higher-end Tesla models.

Recent data indicates that Tesla's vehicle values are depreciating faster than the overall market, making it increasingly difficult for owners to sell or trade-in their cars.

Tesla's stock has also suffered, plummeting nearly 50% since mid-December 2024, largely due to sales declines and controversies surrounding Elon Musk's political focus.

Polestar's CEO, Michael Lohscheller, is strategically positioning the company to capitalize on Tesla's challenges, leveraging the current market climate to boost interest in the Polestar brand.

Last year, Polestar sold 44,851 vehicles globally and is expanding its model line, utilizing resources from Volvo to enhance its credibility in the competitive electric vehicle market.

The Polestar 3 is designed as a mid-size electric SUV, featuring Scandinavian minimalism, a refined interior, and advanced performance capabilities, including a range of up to 350 miles.

With 517 horsepower and the ability to accelerate from 0 to 60 mph in just 4.5 seconds, the Polestar 3 offers impressive handling and a unique torque vectoring system.

These incentives are particularly attractive to Tesla owners who may be facing negative equity due to aggressive price cuts from Tesla.

As Polestar continues to gain traction, the current buying climate is further bolstered by consumers rushing to make purchases before potential tariffs impact prices.