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Volvo’s recent announcement about its future electric strategy is only part of its Chinese owner’s worldwide ambitions
You may have heard that Volvo is to be the first car company to go all-electric. The headlines proclaimed that this is the end of the internal combustion engine, the start of a new era in private transportation. Of course, it is nothing of the sort.
Volvo’s announcement in July said simply that, from 2019, all of its new models will have some form of electrification: pure electric, plug-in hybrid, or mild hybrid. Chief executive Hakan Samuelsson said that it marks the end of the solely internal combustion-engined car.
Volvo had already promised hybrid versions of all its future products; the latest, the XC60 T8 plug-in hybrid (PHEV) will be here before the end of the year. The existing model range will not be affected and most, as now, will be sold with diesel engines alone. The universal electrification will apply only to these models’ successors and some of the smaller cars that will replace the V40 but Samuelsson promised five additional pure electric BEVs (battery electric vehicles) between 2019 and 2021.
In reality, the bulk of those electrified cars will be mild hybrids using a 48-volt hybrid system with a petrol engine. Several manufacturers have indicated that they plan to use a 48-volt system which is much more efficient than a 12-volt system at harvesting regenerative power from deceleration and braking.
Premium carmakers all have similar plans to increase electrification, which is essential if they are to meet the EU emissions limits set for 2020. Volvo was the first to spell out the strategy. It was a public relations coup and another example of how the company has turned itself round since it was acquired by Zhejiang Geely Holdings in 2010.
Encouraged by Volvo’s success, Geely, the biggest privately-owned Chinese carmaker, has embarked on a major expansion plan. This year alone, it has launched Lynk & Co, a new ‘export’ brand which arrives in the UK in 2019; set up Polestar as Volvo’s stand-alone performance brand; opened a new factory for the London Taxi Company near Coventry; and taken a controlling interest in Proton of Malaysia and its UK subsidiary, Lotus.
It is too early to know what will happen to Lotus but, clearly, it gives the Geely Group an automotive engineering centre in the UK. The London Taxi Company’s new hybrid taxi has a bonded aluminium chassis as pioneered by Lotus, uses Volvo components and has the new three-cylinder Volvo/Geely petrol engine. LTC’s impressive facility, with a capacity to make 36,000 vehicles a year, seems far too big to cater for the London cab market (maximum 3,000 a year) but makes sense when you consider the potential for an electric/hybrid light commercial vehicle built on the same platform.
Like Tata and Jaguar Land Rover, Geely has a hands-off policy for Volvo, which is run by Europeans in Sweden, but unlike the Indian group, it has vigorously applied Volvo technology to its own products. It has built factories in China that supply international markets; the first Chinese-made Volvo S90s arrived in the UK recently, transported across Siberia by train.
For the Volvo dealer network, the biggest imminent change is establishing Polestar as a separate brand (see panel) and there is no plan to integrate with other businesses in the Geely Group. It has already been announced that Lynk & Co cars, sharing Volvo components and systems, will be sold direct, without dealers.
Meanwhile, Volvo’s business continues to grow. Based on half-year figures, it will sell 560,000 cars this year. Volvo Car UK was up 7.5% in 2016, finishing at 46,696, and expects to end this year just short of 50,000. Volume increase has slowed in part because of raised prices for more sophisticated new models like the XC60 which confirm Volvo’s shift from near luxury to a true premium brand.
Inspired by Mercedes-AMG and BMW’s M division, Volvo is to launch Polestar as a separate performance brand. Polestar has been established as a stand-alone business with Volvo design chief Thomas Ingenlath as its chief executive and Jonathan Goodman (once head of Peugeot in the UK) as chief operating officer.
Polestar will offer a range of high performance electrified models (including two BEVs) based on Volvos but not carrying the Volvo name or logo. With a designer in charge, the intention seems to be to offer unique body styles rather than (or perhaps as well as) enhanced Volvo models. Confusingly, Volvos with ‘Polestar Engineered’ tuning kits will continue to be available.
Volvo Car UK is still working on how to fit Polestar into the network. The volume will be relatively small, so it will be accommodated in existing showrooms, but it is not yet decided how many dealers will offer the new brand.
