Carmakers everywhere are scrambling to figure out how to keep up with the Tesla hype. Chinese-owned VOLVO believes it now has an answer, but it's not what you think.

Instead of just producing electric cars under the VOLVO brand, the car manufacturer has decided to turn its tuning arm, Polestar, into the brand and manufacturer behind its new range of electric cars.

The Polestar 1 was debuted in Shanghai and the car, producing 600 HP, will be Polestar's top model going forward. In four years, VOLVO projects to have three separate models, which will serve a range of customers from low to high-end.

From an external design standpoint, not much separates the Polestar 1 from its VOLVO counterparts, however, Polestar boss Thomas Ingenlath suggested taking a different approach to design in the future and forging a separate identity.

In a surprising twist, Ingenlath has said these cars will be produced in a new factory at a clip of around 500 a year, but will not be sold. Customers will lease the cars on a flat-rate basis. Exact details have yet to be released.

In related news, Hyundai's latest concept looks like it wasn't built by Hyundai – and that's a good thing.

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