Last week’s headlines from Volvo were all about their decision to relax their target of selling 100% EVs by 2030. The new target – given the slowing growth curve of the current EV market – is that 90% of Volvo’s sales will be EVs by the year 2030.
While 10% doesn’t seem like an earth-shattering difference, it is a big deal because it accepts the fact that change is hard and rarely happens linearly. Yet Volvo was very clear that they are ready at any time to phase out their remaining ICE vehicles, whether than happens in the next few years or at the start of the 2030s.
But beyond the headline was some truly interesting context/nuance behind the big story.
The most fascinating item is that Volvo doesn’t see any need to develop new ICE engines. Volvo spun off its ICE engine development years ago, and they aren’t going back. Volvo sees future cars defined by their software, not by their engines. That’s a big thing for a car company to say out loud.
One example of this is that Volvo has already subbed in 3-cylinder ICE engines for some of their smaller hybrids. Whereas in the past OEMs wouldn’t think of trumpeting a smallish engine in their products, Volvo doesn’t see a downside now. Performance matters, not the size of an ICE engine.
Ultimately, whatever the pace at which people adopt EVs, Volvo feels that ICE engines are for all intents and purposes on a glide path towards obsolescence.
Volvo foresees plug-in hybrids as a substantial bridge to an electrified future. And for Volvo, they’ve continued to add hybrid battery capacity to their hybrids, while reducing the cost of the battery packs. For Volvo, a new three-layer battery packs costs less than the previous generations, giving them more electric power at less cost.
Another interesting tidbit is that Volvo electric engines operate at 90% internal efficiency (versus 30% internal efficiency for ICE engines), but Volvo sees room to grow that efficiency even higher. Think about the cost savings when the motor which propels your car is 60+% more efficient!
