Volvo: We Already Have Electric Cars, But The Market Isn’t Ready for Them

Around the same time that Nissan was readying its 2011 LEAF electric car for market, Swedish automaker Volvo was working on its own electrified vehicle: a 100 percent electric conversion of its C30 compact four-seat hatchback. It was fun to drive, had a reasonable range, and came with not one but three different heating systems to enable it to live out cold winters north of the Arctic Circle without completely sacrificing winter performance.

Volvo C30 Electric

Volvo’s C30 electric hatchback was great, but never made it to production.

 

Sadly, the Volvo C30 never made it to production, despite being used since as a test-bed for all kinds of new electric vehicle technology, including a fast 22 kW three-phase on-board charger, inductive charging and even connected home integration. Despite continuing its electric vehicle development program and having electric cars which it says are ready for market, Volvo has no immediate plans to launch an all-electric car any time soon.

That’s according to Volvo’s vice president of product strategy, Lex Kerssemakers, who has told Autocar that while Volvo is ready to launch fully electric vehicles into the marketplace, it won’t do so until market or legislative demand makes it necessary.

“Our focus is on the roll-out of our plug-in hybrids,” he said. “Once there is a more sustainable business case behind full EV we can do it — our platform is scaleable and fully flexible. But we must see how the EV business evolves and what pressures there are from fuel efficiency requirements and cities closing borders.”

Financial logic?

This seems a particularly disappointing stance from an automaker which has previously committed to being zero emission by 2020, but it’s also not particularly surprising, because Volvo isn’t that big an automaker. Instead of being a complete dismissal of electric cars, we suspect there’s financial concerns about the large investment needed to bring a fully-electric model to market.

Volvo: for now, we'll make plug-in hybrids.

Volvo: for now, we’ll make plug-in hybrids.

Consider this: Volvo’s largest two markets (the U.S. and Sweden) amass the kind of annual sales totals for Volvo that some of the larger U.S. automakers (Ford, Chrysler, and General Motors) manage in just a week of U.S. sales.

Being smaller — despite being owned by Chinese parent company Geely — Volvo doesn’t have access to the large capital that the Detroit Three do. That fact alone explains why the outgoing Volvo XC90 was one of the industry’s oldest models, spanning twelve years without a generational refresh.

And when we’ve spoken candidly with Volvo’s executives in the past, there’s a distinct underlying business logic to everything Volvo does.

If it can make money from a technology, and it knows the technology will drive sales, it will invest in bringing that technology to market. So far, that kind of decision has brought some massively advanced safety technologies to market, including some which will debut in the 2015 XC90 when it goes on sale this year.

That same logic has also brought Volvo’s V60 plug-in hybrid wagon to market in Europe, and will bring the range-topping XC90 T8 plug-in hybrid SUV to market this year too. In both cases, Volvo has referred to its plug-in hybrids as cars which are ‘without compromise,’ boasting everything that a standard gasoline or diesel-powered Volvo would have with the added benefits of zero-emission, in-town capabilities. In addition to all of Volvo’s legendary safety features and luxury interiors, both plug-ins boast all-wheel drive capabilities and the ability to tow, something not all plug-ins offer.

The XC90 plug-in hybrid is the second plug-in hybrid from Volvo to go on sale.

The XC90 plug-in hybrid is the second plug-in hybrid from Volvo to go on sale.

“With plug-in technology, we have some answers now — good efficiency and the option of driving in and out of cities on electric power alone,” said Kerssemakers. “For now, we can offer the best of both worlds.”

Logical or not?

Given Volvo’s propensity for long production cycles and the breathtaking speed at which the electric car world is evolving today, Volvo’s move to not bring any all-electric cars into production any time soon does make at least some sense, especially given its predominant target market segments.

Were Volvo to bring an electric car to market today, it could risk it becoming quickly outdated as the next-generation battery packs promised by GM, Nissan and Volkswagen up base-level range expectations to 150 or 200 miles per charge when they debut in production vehicles over the next few years.

By not bringing a vehicle to market however, Volvo risks missing the plug-in party altogether, losing out to larger, more aggressive automakers willing to take a risk on the hope that the current rising demand for plug-in cars across the world will continue.

Unless Volvo’s secret electric car technologies happen to be far superior to those currently being promised by more mainstream brands, we think Volvo’s decision to not launch a plug-in could be a very dangerous one indeed.

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