Volvo Cars announced that every model from 2019 onwards would have an electric motor, making it the first traditional carmaker to call time on vehicles powered solely by an internal combustion engine.
Volvo said on Wednesday that it would put electrification at the core of its business. From 2019 it will only make three types of cars: pure-electric, plug-in hybrids, and so-called “mild” hybrids combining a small petrol engine with a large battery. “This announcement marks the end of the solely combustion engine-powered car,” said Håkan Samuelsson, chief executive.
“Volvo Cars has stated that it plans to have sold a total of 1m electrified cars by 2025. When we said it, we meant it. This is how we are going to do it.” The Swedish carmaker was purchased by Chinese domestic carmaker Geely in 2010.
The new owners have proven to be a catalyst in the race to electrify its models, as China is already the world leader in electric car sales and Geely is the only Chinese-owned carmaker producing vehicles for the US. Nearly 265,000 pure-electric vehicles were sold in China last year, versus 110,000 in all of Europe, according to data compiled by EV-Volumes.com.
Globally, the market for pure-electric cars is tiny, accounting for less than 1 per cent of sales last year, but is growing quickly. From January to March, global sales of plug-in vehicles — comprising EVs and plug-in hybrids — rose 40 per cent to 191,700 units, according to EV-Volumes.com.
If the growth rate since 2013 were to continue, then eight out of 10 cars sold in 2030 would be plug-ins. Volvo said it would launch five pure-electric cars between 2019 and 2021. Three will come from Volvo while two will come from Polestar, the high-performance unit it launched last month. By 2019 no new Volvo cars will be sold without an electric motor, as internal combustion cars are “gradually phased out”, Volvo said.
It also aims to make its manufacturing operations “climate-neutral” by 2025. Analysis: Volvo shakes up car market in pursuit of electric dream Lex: Electric cars, volt’s going on? News: Tesla’s Musk says Model 3 set to be delivered on schedule Volvo’s agenda is likely to raise questions about the position of Tesla, the US electric car start-up whose market valuation has soared during a time in which it has no serious rivals in pure-electric cars. Tesla, which sold 76,000 cars last year, plans to produce 1m cars a year by 2020, yet at $58bn its market valuation is already larger than that of General Motors, which sold 10m cars last year.
Tesla’s Model 3 sedan is unveiled in March 2016 © AP
Tesla has gained wild-eyed support from investors, who believe in the zero-emission future envisioned by chief executive Elon Musk.
The first wave of Tesla’s all-important Model 3 — the car Mr Musk hopes will turn low-priced electric vehicles from worthy but range-challenged rides for do-gooders into an object of desire for the masses — is set to be delivered to customers on schedule this month.
But the Volvo announcement underscores that its days as the only premium maker of electric cars are numbered.
Jaguar has said that its all-electric five-seater sports car, the I-Pace, will go on sale late next year, while Audi will begin selling two premium electric cars in 2019, the same year that Mercedes-Benz will launch its first electric sport-utility vehicle as part of its new EQ brand.
At the Frankfurt motor show in September, BMW is expected to announce an electrified 3-Series car, its best-selling line of cars.
By 2020, traditional carmakers are set to have a wide array of electric cars on offer, with ranges of about 500km, said Michael Muders, portfolio manager at Union Investment.
“I think that it’s going to be pretty tough for Tesla to keep a position in this space,” he said.
“The empire is going to strike back.”