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Volvo's Move to EVs Not That Radical; China is Potential Market

July 12, 2017
The Chinese-European company announced that from 2019 all of its vehicles will be either pure electric or hybrid electric.

Volvo Cars has been in the news recently in relation to its announcement to leave the internal combustion engine only-based automotive industry. The Chinese-European company announced that from 2019 all of its vehicles will be either pure electric or hybrid electric. In this way it has been argued the company is making a bold move toward electrification of vehicles.

According to analysis from IDTechEx, however, the move is not that revolutionary, as technically speaking, the company is not entirely making a bold movement to only 100% "strong" hybrid electric and pure electric vehicles. The company will launch in 2019 a "mild" hybrid electric vehicle, known in the industry as 48V hybrid electric platform. This is a stepping stone between traditional internal combustion engine companies and "strong" hybrid electric vehicles such as the Toyota Prius.

The 48V platform is being adopted by many automotive manufacturers, not only Volvo. OEMs like Continental developed this platform to provide a "bridge technology" External Link towards full EVs for automotive manufacturers, providing 6 to 20 kW electric assistance. By comparison, a full hybrid system typically offers 20-40-kW and a plug-in hybrid, 50-90 kW. Volvo had already launched the first diesel plug-in hybrid in 2012, and the company will launch a new plug-in hybrid platform in 2018 in addition to the launch of the 2019 pure electric vehicle platform. Going only pure electric and plug-in hybrid electric would be really revolutionary, according to IDTechEx researchers.

The launch of a pure electric car in 2019 is a great move indeed, IDTechEx reported, considering that the company has been owned by Chinese vehicle manufacturer Geely since 2010. The Chinese electric vehicle market has been booming in the last years reaching a sales level of 350,000 plug-in EVs (pure electric and plug-in hybrid electric cars) in 2016.

The Chinese plug-in EV market grew 300% from 2014 to 2015 but cooled down to 69% growth in 2016 vs 2015, still pushing a triple digit growth in pure electric cars. The Chinese government announced that in 2017 sales will reach 800,000 NEV (new energy vehicles including passenger and bus, both pure electric and hybrid electric).

IDTechEx believes that China will not make it to that level, but will definitely push the figures close to that mark. The global plug-in electric vehicle market will surpass 1 million sales per year for the first time at the end of 2017. Until recently this market has been mostly dominated by Chinese manufacturers, being BYD the best seller of electric cars in the country with 100,000 plug-in EVs sold in 2016. Tesla polemically could not penetrate the market but in 2016 sold around 11,000 units. While the owner of Volvo Cars, Geely, is active in China selling around 17,000 pure electric cars per year, it might be that Volvo has now realized that it can leverage its brand in the Chinese premium market to catch the huge growth opportunity in China and will need to participate as soon as possible.

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