Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019
07-05-17, 08:12 AM
#1
Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019
Risky move,IMO.
Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019
CEO reiterates target of selling one million electric cars and hybrids by 2025
Will Other Car Makers Follow Volvo's Switch to Electric?
William Boston
July 5, 2017 12:00 a.m. ET
For Volvo the internal combustion engine has run its course.
In the face of competition from upstarts like Tesla Inc., which begins production this week of its new mass-market Model 3 electric battery-powered family car, the Chinese-owned automotive group on Wednesday said all new Volvo models from 2019 would be either fully electric or a hybrid.
Volvo is the first major auto maker to abandon the technology that has powered the industry for more than a century. Hakan Samuelsson, president and chief executive of Volvo Cars, said in a statement that the move “marks the end of the solely combustion engine-powered car,” reiterating his target of selling one million electric cars and hybrids by 2025. “When we said it, we meant it. This is how we are going to do it.”
Volvo also said it would launch five new electric and hybrid vehicles between 2019 and 2021. Two of the new models would be built by Polestar, the performance-car unit that Volvo is spinning off as a “separately branded electrified global high performance car company.” Volvo Cars would build the other three models. No further details were available.RELATEDAll major auto makers are preparing for a shift to electric vehicles, but the challenge for the industry is to get the timing right because of the industry’s typically long product cycles that involve years of research and development before a vehicle rolls off the assembly line.
Auto executives talk about an impending “tipping point” when the costs of some electric car models are expected to fall below the cost of the conventional version of the same vehicle type. When that happens, industry executives and analysts say momentum could shift quickly in favor of electric cars.
Industry analysts estimate that rising costs of developing combustion engines that meet ever-stricter emissions regulations could make some electric models more affordable as soon as 2025. With a starting price of around $35,000, the Tesla Model 3 that launches this week is only slightly more expensive than BMW AG’s 3-Series sedan with a gasoline or diesel engine.
Volvo’s decision to accelerate the move to go electric could help it in light of a potential stock listing. Volvo, a Swedish luxury car maker that was founded in 1927, was bought by Ford Motor Co. in 1999. Ford sold the company to Geely Holding Group, a Chinese investment company, in 2010.
Struggling when Geely acquired it, Volvo has achieved a significant turnaround and is building its first manufacturing plant in the U.S.
Geely’s wager is paying off. Volvo reported a 67% increase in net profit to 7.5 billion Swedish kronor ($880 million) in 2016 on revenue of 180.7 billion kronor, up 10% from the previous year. The Swedish company’s global sales grew 6% to 534,332 vehicles last year. That put it on track to achieving its sales target of 800,000 vehicles by 2020.
The U.S. was Volvo’s fastest-growing market last year, posting an 18% increase in sales to 82,726 vehicles, driven by the popular XC90 luxury sport-utility vehicle.
Volvo declined to comment on speculation about an initial public offering, saying a listing was an option.
European auto makers that have relied on diesel engines because of their fuel economy and low carbon dioxide emissions have seen their stock prices discounted as investors worry about the growing number of municipal authorities that threaten to ban diesel vehicles from driving in their cities.
By contrast, Tesla, which only makes electric cars, sold around 84,000 cars last year, but its market value has surpassed those of Ford, General Motors Corp and BMW, which sell millions of cars each yea
Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019
CEO reiterates target of selling one million electric cars and hybrids by 2025
Will Other Car Makers Follow Volvo's Switch to Electric?
William Boston
July 5, 2017 12:00 a.m. ET
For Volvo the internal combustion engine has run its course.
In the face of competition from upstarts like Tesla Inc., which begins production this week of its new mass-market Model 3 electric battery-powered family car, the Chinese-owned automotive group on Wednesday said all new Volvo models from 2019 would be either fully electric or a hybrid.
Volvo is the first major auto maker to abandon the technology that has powered the industry for more than a century. Hakan Samuelsson, president and chief executive of Volvo Cars, said in a statement that the move “marks the end of the solely combustion engine-powered car,” reiterating his target of selling one million electric cars and hybrids by 2025. “When we said it, we meant it. This is how we are going to do it.”
Volvo also said it would launch five new electric and hybrid vehicles between 2019 and 2021. Two of the new models would be built by Polestar, the performance-car unit that Volvo is spinning off as a “separately branded electrified global high performance car company.” Volvo Cars would build the other three models. No further details were available.RELATEDAll major auto makers are preparing for a shift to electric vehicles, but the challenge for the industry is to get the timing right because of the industry’s typically long product cycles that involve years of research and development before a vehicle rolls off the assembly line.
Auto executives talk about an impending “tipping point” when the costs of some electric car models are expected to fall below the cost of the conventional version of the same vehicle type. When that happens, industry executives and analysts say momentum could shift quickly in favor of electric cars.
Industry analysts estimate that rising costs of developing combustion engines that meet ever-stricter emissions regulations could make some electric models more affordable as soon as 2025. With a starting price of around $35,000, the Tesla Model 3 that launches this week is only slightly more expensive than BMW AG’s 3-Series sedan with a gasoline or diesel engine.
Volvo’s decision to accelerate the move to go electric could help it in light of a potential stock listing. Volvo, a Swedish luxury car maker that was founded in 1927, was bought by Ford Motor Co. in 1999. Ford sold the company to Geely Holding Group, a Chinese investment company, in 2010.
Struggling when Geely acquired it, Volvo has achieved a significant turnaround and is building its first manufacturing plant in the U.S.
Geely’s wager is paying off. Volvo reported a 67% increase in net profit to 7.5 billion Swedish kronor ($880 million) in 2016 on revenue of 180.7 billion kronor, up 10% from the previous year. The Swedish company’s global sales grew 6% to 534,332 vehicles last year. That put it on track to achieving its sales target of 800,000 vehicles by 2020.
The U.S. was Volvo’s fastest-growing market last year, posting an 18% increase in sales to 82,726 vehicles, driven by the popular XC90 luxury sport-utility vehicle.
Volvo declined to comment on speculation about an initial public offering, saying a listing was an option.
European auto makers that have relied on diesel engines because of their fuel economy and low carbon dioxide emissions have seen their stock prices discounted as investors worry about the growing number of municipal authorities that threaten to ban diesel vehicles from driving in their cities.
By contrast, Tesla, which only makes electric cars, sold around 84,000 cars last year, but its market value has surpassed those of Ford, General Motors Corp and BMW, which sell millions of cars each yea
07-05-17, 09:02 AM
#4
Lexus Fanatic
Their current XC90 hybrid lists at $105k. At least they have demonstrated they have the ability to build an affordable hybrid vehicle.
My first 3 vehicles that I bought as a teen were Volvos (junk, but they all had 4 disc brakes and duct tape repaired the front fenders). What a shame to see what this car co. has become, imho.
My first 3 vehicles that I bought as a teen were Volvos (junk, but they all had 4 disc brakes and duct tape repaired the front fenders). What a shame to see what this car co. has become, imho.
07-05-17, 09:04 AM
#5
Lexus Champion
Excellent move, in my opinion. It will be fun to watch how this plays out.
07-05-17, 10:02 AM
#6
Lexus Fanatic
Very risky move, if they actually go through with it. Current-technology batteries, even those that are Tesla-sourced, still limit pure-electric-vehicle range too much for many American drivers going long distances. Plus, electric-utility plants are limited in the amount of electricity they can generate at peak-demand hours and times, especially during very hot or cold weather, when electrical-usage by furnaces and air-conditioners is at its peak.
07-05-17, 10:10 AM
#7
Lexus Champion
I don't think it's that risky. I would wager that it will be mostly hybrids with a small number of full electrics to start.
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07-05-17, 10:24 AM
#8
LOL, they figured out how to keep making their cars even more boring than they are already.
-Mike
-Mike
07-05-17, 10:30 AM
#9
Lexus Fanatic
They want to be like KMart, only they can't find Martha Stewart. It's amazing how long brands can have value, even if the brand has nothing to do with what it once was. We're talking about a car co. that put 4 wheel disc brakes on all its cars in 1975. 3 point safety belts in the rear in 1973. But by 1993, this safe vehicle was not going to be able to meet 1995 standards (um, because it was a 1975 car and it was now 1993). At some point, as the song goes, the jig is up.
07-05-17, 10:39 AM
#10
Lexus Fanatic
I would agree, if that is indeed the case. But the article itself doesn't necessarily say that. It also fails to differentiate between regular conventional hybrids, and Extended-Range Hybrids with plug-in-outlets that can recharge overnight. The extended-range hybrids, of course, place more demand on local electric-utilities to generate power.
Last edited by mmarshall; 07-05-17 at 10:43 AM.
07-05-17, 10:42 AM
#11
I like this move by Volvo. It gives them this chic niche to capitalize on, since they never will be the Daimler, GM, Toyota etc.. of this world. Going green is a great image booster and who knows they could be spearheading a movement. I wouldn't be surprised to see a company like Mitsubishi or NEVS-Saab (which is transitioning sans the Saab name) follow suit.
A fun rivalry could be Volvo Polestar vs Tesla <insert Elon Musk trolling name here>
A fun rivalry could be Volvo Polestar vs Tesla <insert Elon Musk trolling name here>
07-05-17, 10:45 AM
#12
Lexus Fanatic
I like this move by Volvo. It gives them this chic niche to capitalize on, since they never will be the Daimler, GM, Toyota etc.. of this world. Going green is a great image booster and who knows they could be spearheading a movement. I wouldn't be surprised to see a company like Mitsubishi or NEVS-Saab (which is transitioning sans the Saab name) follow suit.
A fun rivalry could be Volvo Polestar vs Tesla <insert Elon Musk trolling name here>
A fun rivalry could be Volvo Polestar vs Tesla <insert Elon Musk trolling name here>
Volvo doesn't need an energy-green trademark. They already have one...safety features, though, to some extent, they share that moniker with Mercedes. Volvo (and Mercedes) have long been known as the auto industry's top safety innovators.
07-05-17, 11:10 AM
#14
Pole Position
Their current XC90 hybrid lists at $105k. At least they have demonstrated they have the ability to build an affordable hybrid vehicle.
My first 3 vehicles that I bought as a teen were Volvos (junk, but they all had 4 disc brakes and duct tape repaired the front fenders). What a shame to see what this car co. has become, imho.
My first 3 vehicles that I bought as a teen were Volvos (junk, but they all had 4 disc brakes and duct tape repaired the front fenders). What a shame to see what this car co. has become, imho.
07-05-17, 12:42 PM
#15
Lexus Fanatic
If their goal is to sell even fewer vehicles in the US then they will succeed, the all 4 cyl lineup started the process. Have fun going out of business, at least in the US.