Online sales only, carbon neutrality, 100% electric vehicles, end of leather seats, traceability of cobalt … Volvo is projecting itself towards a responsible future.
Volvo struck a big blow on Tuesday. The Swedish brand has confirmed what has been floating in the air for a while. Its future will be entirely electric, starting in 2030. The objective of the Chinese subsidiary Geely is to remove all its gasoline, diesel and even hybrid vehicles from its catalog by then.
Volvo is the first major brand to unveil such an ambitious global plan. Ford and Bentley have already announced a similar plan, but only for Europe. Within Jaguar Land Rover, Jaguar to go fully electric by 2025, but in 2030, there will still be combustion vehicles at Land Rover. Smart, the city brand of the Daimler group had also developed an all-electric strategy, but since then Daimler has sold 50% of its subsidiary to Geely, which is Daimler’s largest shareholder. And new models are expected which will now be produced in China.
“Rest assured, they have a future and will remain important partners.”
With its 2030 target, the Volvo even exceeds the targets of many European countries and cities for the combustion engine. Obviously, Volvo is helped by its premium positioning. “I think it’s easier in the premium to have more expensive products. In the volume segment, you have to have very low costs and directly large volumes”, concedes Hakan Samuelsson, CEO of Volvo Cars .
Tuesday’s announcement comes with a small revolution also at the commercial level. Electric vehicle sales will now be done only online, with offers to buy or lease. No more opaque discounts, Hakan Samuelsson announces transparent prices.
“We hope to arrive between summer and Christmas at capacities of 135,000 100% electric cars.”
Volvo’s network is obviously shaken. An electric car requires less maintenance and if Volvo sells its cars directly online, isn’t that another important part of the business that the dealers might miss? “Let them be reassured. They have a future. Cars bought online will be delivered to the dealer of their choice. They will take care of the service and the explanation of the vehicle. Many people will want assistance with their online purchase and can do so at the dealer, who will be paid for it. In addition, they will have a role to play in the second life of these cars. These partnerships will remain important, ”says Samuelsson.
The C40 for Volvo Ghent
At the Ghent plant, where electrification is progressing rapidly, the announcement is well made. Especially since Volvo took advantage of this Tuesday to present its brand new C40, a car that will also be produced in Ghent in the fall. The factory specializes in small Volvos. The C40 is actually a coupe version of the XC40 and will only be available in an electric version.
“Climate change is the ultimate safety test.”
The production capacity of electric vehicles will be tripled this year in Ghent. “We hope to arrive between summer and Christmas at capacities 135,000 100% electric cars“, detailed us in January the boss of the factory, Stefan Fesser. From 2022, 60% of production capacity will be ready to produce electrified vehicles (hybrid and electric).
But Volvo’s approach is also ethical. “Climate change is the ultimate safety test,” claims Volvo, recalling that “Volvo cared about the safety of cars long before others.”
“We have our share of responsibility and we must find solutions. Consumers want a brand that cares about doing the right thing so that they can drive a Volvo with peace of mind, ”said Linn Fortgens, Volvo Sustainability Manager.
Volvo is therefore taking further steps forward. Society wants to be completely carbon neutral by 2040. It also means, “for the sake of animal welfare”, do not no more putting leather in his cars. Above all, the company promises a cobalt traceability of its batteries based on blockchain technology coupled with audits in the field.
3 questions to Hakan Samuelsson, CEO of Volvo Cars
The first reactions to your switch to 100% electric are not all positive. How are you going to convince customers?
This will not happen tomorrow. We have nine years left to convince. I remember when we switched to 4 cylinders or put the speed limit, it was the same thing, but we didn’t lose any customers. We have time and we have hybrid concepts pending for those who do not have a charging solution.
What are the implications of the switch to 100% electric for the Volvo Ghent plant? When will the plant stop producing thermal versions?
Belgium will produce the C40. It is Volvo’s first electric car without a thermal alternative. The factory already produces the XC40 in its combustion, hybrid and electric versions. The hybrid version of the XC40 will remain. But a little before 2030, when it will be necessary to renew the XC40, the plant should stop producing thermal vehicles. There has been some nervousness in the past about the future of the factory. It is now insured. Volvo Ghent has played a pioneering role in electrification and we are very happy with it.
You will be offering cars in preconfigured versions with few options to choose from. Is this also a way of facilitating the export of models from China and the parent company Geely?
No, it doesn’t come from there. It’s about making the offer better for the customer. They don’t like today’s complicated buying process. Having pre-selected options will also allow for much shorter delivery times. A transparent online price will be offered with packages including insurance, maintenance, etc. This is what customers want.