What’s Been Happening? A Personal Best
In 2015, a luxury vehicles company set a global sales record for itself when it sold more than half a million cars for the first time in its 89 year history. Volvo subsequently announced plans in April 2016 to sell 1 million electrified vehicles by 2025 which is a cumulative total of sales from 2012 to 2025, not a yearly figure. Its first fully electric vehicle is expected to reach dealerships by 2019.
What Now? On Track
On Wednesday, the automaker announced that all future models will use some form of electric propulsion, whether in hybrid form with a gas engine or all-battery models. It will be the first broad luxury brand to announce plans to electrify all of its products, ditching the combustion engine only models. Luxury brands have traditionally relied on V-8 engines for power amongst their prestigious models but Volvo has already adopted to an exclusive four-cylinder line-up. At this stage, Volvo is remaining secretive about what percentage of future products will be conventional hybrids, plug-ins or pure battery offerings.
Three new mainstream products are set to roll out between 2019 and 2021. Electrified products will be produced in Europe, China and in a new plant that is currently being constructed in South Carolina.
Volvo’s announcement has received a mixed response. Industry analysts in the U.S say the strategy to become fully electric is risky, given that sales of all forms of electrified vehicles slipped last year, partly due to a decrease in a gasoline prices. However, several factors such as the declining cost of batteries and improved vehicle range may start to attract more customers.
What’s Next? Convenience & Support is Key
Although innovations in battery technology will increase range and reduce costs, it does not negate the need for regular charging. Whilst owners could easily accomplish this at home, it may be more difficult when they are looking to travel long distances. Additional investment in a network of remote charging stations needs to be done to overcome this issue. It remains largely uncertain as to who is going to bear the costs of doing so as well. Japan is already one step ahead, where there were more charging stations than filling stations as of April 2016.
An increase in electric cars on the road will need to be adequately supported by power companies that are able to cope with the increased demand. As reported in the Sydney Morning Herald, “A recent Morgan Stanley report found that a typical electric car requires the same amount of power as the average British home over the course of a year.”