By Zaheer Kachwala and Marie Mannes

(Reuters) - Polestar, the Swedish electric vehicle (EV) manufacturer, is rolling out a significant promotional offer aimed at current Tesla owners in the United States. The company is providing discounts of up to $20,000 on leases for its Polestar 3 model. This move appears to be a strategic effort to attract Tesla drivers who may be feeling disillusioned with CEO Elon Musk's brand, especially as market dynamics shift in the evolving EV landscape.

The initiative, highlighted on Polestars official website, comes at a time when the demand for electric vehicles has not met initial expectations. Industry analysts are also expressing concerns over potential increases in vehicle prices due to looming higher tariffs, which could further affect consumer behavior.

The pricing structure for the Polestar 3 is notable: a fully equipped, long-range, dual-motor version typically retails for around $93,000. However, with the generous discount available for Tesla owners, the effective cost could drop to approximately $73,000, making it a more attractive option compared to the Tesla Model S, which has a starting price just below $80,000.

We piloted a conquest campaign in late February. Based on the positive response we received, we decided to extend this initiative into March and are now continuing it into April, explained a Polestar spokesperson during an interview with Reuters.

The Polestar 3 is manufactured in a Volvo Cars factory located in South Carolina, which underscores the companys commitment to bolstering its production capabilities within the United States.

In a broader context, Tesla's stock has experienced a sharp decline, plummeting 32% this year due to disappointing sales figures and a significant uptick in trade-ins. This downturn has been exacerbated by ongoing scrutiny of Musk, particularly regarding his controversial association with the Trump administration and his recent moves to reduce federal spending.

As the automotive market becomes increasingly competitive, Polestar is not alone in its pursuit of market share. The company joins a host of automakers, including Ford Motor and Stellantis, who have begun offering substantial discounts to entice buyers. Hyundai has also publicly stated its intention to stabilize car prices amidst these market fluctuations.

Polestar is actively working to expand its manufacturing presence in the U.S. while decreasing its reliance on Chinese production. This strategy has gained renewed importance following the imposition of sweeping tariffs by U.S. President Donald Trump on the Chinese auto market. In line with this trend, other American manufacturers are also ramping up their domestic production efforts. For instance, General Motors recently announced plans to increase output at one of its Indiana factories, while Hyundai has made a commitment to invest $21 billion in its U.S. operations.

Earlier campaigns by Polestar have reportedly yielded positive results, with company representatives indicating that recent order volumes for the Polestar 3 have surged. Jordan Hofmann, Polestars head of sales in the U.S., even shared on LinkedIn that this week marked some of the highest order days for the vehicle, highlighting the success of their Tesla Conquest Offer.

While Polestar has not provided specific figures or detailed metrics regarding the previous promotions, there is a clear sense of optimism within the company. Additionally, U.S.-based EV manufacturer Lucid Motors has jumped on the bandwagon, offering discounts of up to $4,000 for customers who trade in a Tesla vehicle when purchasing their luxury Air sedans.