Volvo plans to electrify all of its cars. Are the days of the combustion engine numbered? – Los Angeles Times
When people think of Volvo, they tend to think of safety. For decades, that’s how the once-Swedish company advertised its cars.
Now under Chinese ownership, Volvo Cars aims to set itself apart as an aggressive early mover in the electrification of the automobile.
On Wednesday, the company said that all new models starting in 2019 will be equipped with an electric motor. Some will be hybrids. Some will be pure electrics. But as new models come on line, Volvo plans to phase out the conventional automobile powertrain that runs 100% on gasoline or diesel fuel.
“This announcement marks the end of the solely combustion-engine-powered car,” Volvo Chief Executive Hakan Samuelsson said in a conference call with reporters. “People increasingly demand electrified cars, and we want to respond to our customers’ current and future needs.”
Volvo is the first traditional automaker to take such a plunge, which comes despite few signs that the market is ready to bury the combustion engine.
Sales of SUVs and pickup trucks have actually surged recently in the United States, helped by cheap gasoline. And Volvo itself will keep using petroleum-powered engines for some time to come. Current models won’t change their powertrains until they’re upgraded, something that could take years.
The end of the combustion engine “is being overstated,” said Michelle Krebs, senior analyst at Autotrader.
“People always say they’re interested in these cars,” she said of electrics. “They’ll consider them, but they don’t buy them.”
Hybrids and electrics are most popular in California, yet only about 3% of 2016 total car sales in the state were hybrids and about 2% pure electrics. Those numbers are picking up a bit this year.
Nationally, less than 1% of car sales are pure electrics. A report from Deutsche Bank last year predicted that by 2025, “increasingly efficient” combustion engines would still power about 95% of all vehicles.
But global concerns about climate change and air pollution have generated pressure to make the switch. Governments around the world — most notably the Chinese, with the largest car market in the world — are offering incentives and issuing mandates to push buyers into electric cars.
In the wake of emissions-cheating scandals, Europe is moving away from once-popular diesel engines. India is considering banning combustion engines by 2030. Norway, Germany and other countries have also considered bans.
China’s government policies strongly favor electric cars, and the country plans to become a major electric car exporter. China is Volvo’s second-largest market, nearly as large as the United States.
At the same time, battery costs are dropping and maximum mileage range is expanding enough, Volvo believes, to lure more people away from traditional powertrains.
“Volvo has always been an innovator, and this is a massive change in terms of operating a business,” said Akshay Anand, an analyst at Kelley Blue Book.
Volvo’s goal is to sell 1 million electrified cars by 2025, Samuelsson said, including five new pure-electric models.
The first of the pure electrics will be manufactured in China, before assembly expands to Europe and a plant now under construction in South Carolina.
The Volvo brand, while well known, is a niche player in the United States with less than 1% of total passenger vehicle sales.