Volvo Announces Ambitious Hybrid/Electric Vehicle Plan for 2019

Pivot towards clean fuel by India and China can potentially turn out to be a gamechanger for Volvo, which has promised to switch completely to hybrid and electric vehicles by 2019

Volvo Personvagnar AB, the Göteborg, Sweden based automobile manufacturer colloquially known as ‘Volvo’ has stolen a march over its rival car-manufacturers by announcing that it will switch completely to hybrids or gas-electric hybrids by 2019. The company is expected to introduce five electric vehicle models by 2021 and offer hybrid options across its product line.

As per Volvo Chief Executive Officer Hakan Samuelsson: “this announcement marks the end of the solely combustion engine-powered car. Volvo Cars has stated that it plans to have sold a total of 1 million electrified cars by 2025. This is how we are going to do it.” TechSci Research offers insights into the logic behind the decision to propagate electric vehicles and automotive cleantech and its overarching impact on the automotive world.

Volvo’s new announcement may incite a trend that was already very much in the works in the global automobile market. Conventional automakers such as BMW and Audi have been in the process of electrifying their line-ups to meet punitive emissions standards. In fact, by some estimates, battery-powered cars are expected to account for as many as 25% of total car sales over the next decade. No car manufacturer in today’s day and age can ignore the purchasing power potential in India and China, the two most populated countries in the world and also among the fastest growing economies globally.

Both India and China are attempting to curb pollution and greenhouse gas emissions, by switching to electric vehicles. India has vowed to sell only electric vehicles by 2030, and China wants 10% of its automobile fleet to be electric by 2019 (with the rate steadily going up every decade). Of course, an unsaid aspect of the electric vehicle debate is that both countries are some of the biggest oil importers in the world, and the switch to electric vehicles would greatly curb oil dependency, thus removing what could have been a crippling strategic leverage.

There is no doubt that sustainability is a trend that is providing a significant headwind in the global automobile market. TechSci Research report “Global Small Electric Vehicle Market, Competition Forecast & Opportunities, 2022” estimates that the market for small electric vehicles stood at 4.08 million unit in 2016, and is expected to grow at a CAGR of 8.07%, in volume terms, to reach 6.54 million unit by 2022. Also, the rise in CNG and LPG as cleaner fuels sustaining automobiles is a trend running concurrently with growing interest in electric vehicles.

In fact, as pointed out by TechSci Research experts, the implication of a drift in Asian markets towards clean fuel may prove to be a primary growth driver. With the overall rise in prosperity levels and purchasing power in Asia, there has been a palpable if minute shift in preferences towards clean fuels. Given that Volvo expects to do a lot more business in Asia, it can fill a lucrative niche in the Asian automobile market.

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