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Volvo Tips Scales Further Toward Electrification

by Edward Sanchez | Jul 07, 2017

In early July 2017, Volvo made one of the boldest pronouncements yet by a major legacy automaker by announcing that it would end production of automobiles powered by conventional internal combustion powertrains by 2019. Starting that year, all Volvo passenger vehicles would be powered by either a hybrid, plug-in hybrid, or full electric powertrain. In an even more emphatic gesture of its belief in the electrified future, it announced its captive performance division Polestar would henceforth be dedicated to EV development. The company claims this strategy shift was prompted largely by customer feedback expressing their desire to buy more environmentally friendly cars.

Volvo 48-Volt Mild HybridAlthough Volvo’s announcement is somewhat surprising, it is hardly unexpected. The trend toward electrification is being advanced through the twin tailwinds of increasing consumer expectation, as well as increasingly strict governmental guidelines and environmental goals. Among the countries that are targeting emissions-free futures are India (by 2030) France (by 2040), and a 10 percent mandate by China in 2019.

Those of us that have followed the alternative fuels space for the last several decades may remember the California debacle of the 1990s, and the outrage from environmental activists when General Motors unceremoniously reclaimed and crushed its fleet of EV1 “compliance cars.”

Volvo Twin Engine Plug In HybridWhat’s to say we won’t see a repeat of that same fiasco? The major difference this time around is the maturity of battery technology. Although the EV1 had a surprisingly long range for its time, it was saddled with huge lead-acid battery packs weighing more than 1,000 pounds (454 kg). Fast forward two decades, and the pack in the Chevrolet Bolt EV weighs less, and has roughly triple the range.

Tesla Motors CEO Elon Musk has repeatedly said his overarching goal is to spur legacy automakers into building more EVs. With the Tesla Model S out-selling such luxury icons as the Mercedes-Benz S-Class and BMW 7 Series in many markets, and with more than 400,000 reservations on the books for the upcoming Model 3 midsize sedan, the legacy OEs are now paying attention to the electric market. EVs have not yet reached cost parity with ICE powertrains yet, and even with 200+ mile (322 km) range, many buyers still have “range anxiety” surrounding EVs.
Volvo Electric Vehicle Platform

However, with diesels’ nominal “green” image largely discredited by the Volkswagen TDI emissions scandal, the market is primed to finally accept EVs as the green transportation solution. The question is now not so much “if” EVs will be coming, but “how quickly.”

Subscribers to Strategy Analytics’ Powertrain, Body, Chassis and Safety Service can access the latest electrified powertrain forecasts on MetrixLive here.  More details on Strategy Analytics’ automotive offerings can be found on https://www.strategyanalytics.com/access-services/automotive
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