Volvo's canny electric revolution

By David Thomson on Sun, 16 Jul 2017

The company headline ‘‘Volvo Cars to go all Electric'' promises more than will be delivered initially, but Volvo's recently announced move away from cars that rely on petrol (or diesel) power alone is a significant one for the automotive industry.

For those not up with the play, the Chinese-owned Swedish-based car-maker is promising a brave new world starting in 2019. From then on, every new model it launches will either be a petrol-electric hybrid or a pure electric machine. Vehicles in the latter category will include five fully-electric cars to be launched by 2021, three of which will be Volvo models and two that will be high performance electrified cars from Polestar, Volvo's performance car arm.

Existing Volvo models (i.e. those launched before 2019) will continue, presumably, to be either powered purely by petrol (or diesel) or, in rare cases, hybrid power, until such times as they are replaced. Even so, by 2025 Volvo is expecting to be producing around a million pure electric or petrol-electric hybrid cars per annum.

The extent to which this is a big deal is likely to depend on where you are sitting. If it's in a chair at Tesla's HQ in Palo Alto, California, then one answer is certainly ‘‘this falls well short of what we are already doing'', and the other might just be, ‘‘oh no, they're coming for us.'' If it's at the HQ of any of the mainstream car-makers, then the major focus will be on crafting a similar announcement for release in the not too distant future.
Truth is, there probably isn't a single new model on the drawing board of any major car-maker in the world right now that isn't being designed with either a pure electric or hybrid version in mind.

‘‘This is about the customer,'' says Hakan Samuelsson, Volvo president and chief executive. ‘‘People increasingly demand electrified cars and we want to respond to our customers' current and future needs.''

That's a nice line but, actually, it's not just about the customer.

Increasingly stringent regulatory emissions standards have played a vital role in improving vehicle fuel efficiency since the mid 1990s. Right now, we are in the era of the Euro 6 standard, which took effect in September 2014 for passenger cars. It is widely agreed that the next standard, Euro 7, can only be met with plug-in hybrid or pure electric vehicles. That standard comes into effect in 2020.

Europe, of course, is a home market for Volvo. So too, from a company ownership perspective, is China. Guess what? Asia's powerhouse economy is now the world's largest car market, and easily the biggest for electric car sales, too; China's current target is for 11% of all its car sales to be electric by 2020. That will equate to almost 3 million electric car sales per annum.

Where Volvo sees opportunity and inevitability, others will certainly do likewise. Electricity is replacing petrol and diesel as the predominant power source for cars faster than we might have expected.