Volvo Cars announces plans to electrify all new models from 2019
Volvo Cars has stated its intention to begin offering new models without a standalone internal combustion engine (ICE) option from 2019.
IHS Markit perspective
- Significance: Volvo Cars has stated its intention to begin offering new models without a standalone internal combustion engine (ICE) option from 2019.
- Implications: This electrification strategy will start to focus on battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV) and mild hybrids from this point, but ICE-only options will remain available on vehicles launched before 2019.
- Outlook: Volvo's plan should not be confused with a short-term transition to total electrification, but with the total sales volumes anticipated by the brand, cadence of new model introductions over this timeframe, plus existing models with electrification options, the automaker seems well on course for selling 1 million electrified vehicles by 2025.
Volvo Cars has stated its intention to electrify all new models launched from 2019. The company said in a statement that from this point, all incoming vehicles "will have an electric motor, marking the historic end of cars that only have an internal combustion engine [ICE] and placing electrification at the core of its future business." Its wholesale electrification policy will cover battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and mild hybrids.
Volvo added that it plans to launch five BEVs between 2019 and 2021. Three of these will be sold under the Volvo brand, while two will be "high performance electrified cars" under the Polestar brand. Further details of these models will be announced at a later date. The company also noted that these five vehicles will be supplemented by a range of gasoline (petrol) and diesel ICE vehicles with either a mild hybrid 48-volt or plug-in hybrid powertrain option. This, the automaker has said, will represent "one of the broadest electrified car offerings of any car maker," and means that "there will in future be no Volvo cars without an electric motor, as pure ICE cars are gradually phased out and replaced by ICE cars that are enhanced with electrified options."
On the announcement, Volvo's president and chief executive Håkan Samuelsson has said, "This is about the customer... People increasingly demand electrified cars and we want to respond to our customers' current and future needs. You can now pick and choose whichever electrified Volvo you wish." He added, "Volvo Cars has stated that it plans to have sold a total of 1 million electrified cars by 2025. When we said it we meant it. This is how we are going to do it."
Outlook and implications
Volvo has had a progressive powertrain strategy for some time now. As well as gaining data through its C30 electric vehicle (EV) development programme and dabbling with a range of electrification options, including a plug-in hybrid diesel variant of the V60, it made the leap to offering only downsized gasoline and diesel engines with the introduction of its new Volvo Engine Architecture (VEA) range in 2013. This brought with it the use of electrification to meet performance demands and reduce emissions, beginning with the PHEV option on the second-generation XC90 from 2015.
Volvo has already stated that it intended to push for increased electrification. As well as the goal stated above to sell 1 million electrified vehicles by 2025, the company previously laid out an electrification strategy in October 2015 that will launch its first EV by 2019 and its forthcoming Compact Modular Architecture (CMA) being designed to offer varying degrees of electrification. This put Volvo broadly in line with other OEMs.
This latest announcement will to some degree break it away from the pack. Volvo has stated, "The announcement represents one of the most significant moves by any car maker to embrace electrification and highlights how over a century after the invention of the internal combustion engine, electrification is paving the way for a new chapter in automotive history." Even so, Volvo's plan should not be confused with a short-term transition to total electrification. Indeed, while many of its forthcoming vehicles will have electrified powertrain options, Volvo has confirmed to IHS Markit that "existing ICE cars will continue to be made, both diesel and petrol, but all newly launched cars will no longer offer any pure ICE options. Pure ICE cars will as a result be gradually phased out." Given the timeline for the implementation, this is likely to mean that the forthcoming S60/V60 which are forecast to go on sale during 2018, and the new XC40 which will be introduced before the end of the year, will have ICE-only options for a large part of their lifetime. This could be as far away as 2025, if not further, depending on when the Swedish automaker chooses to replace them.
Nevertheless, the timing for this transition to electrification currently suggests that the next-generation V40 could be a beneficiary of this move, as it is due for launch towards the end of 2019. Of greater certainty are the next-generation XC90 and other scalable platform architecture (SPA) vehicle moving to non-ICE only powertrains beginning in 2021. Before this, we expect a standalone BEV model to be introduced in the 2019/20 timeframe. Given that IHS Markit anticipates that Volvo will sell over 700,000 units per annum (upa) globally from 2019, and the cadence of new model introductions over this timeframe, plus existing models with electrification options, at this point the automaker would seem well on course for selling 1 million electrified vehicles by 2025. However, Samuelsson subsequently clarified that this would comprise just its Twin Engine PHEVs and BEVs, making this target more difficult to meet. IHS Markit will make adjustments to its forecast to reflect this latest news where necessary.
About this article
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