Volvo’s plan to offer a plug in hybrid vehicle (PHEV) on one of its larger car lines by 2012 is just the beginning of an ambitious program to spread the technology to its entire lineup by the end of the decade – if not sooner – according to insiders working on future products at the Swedish company.
The Volvo plan arises from CO2 emissions reductions dictated by stringent European Union regulations. These are twice as tough as the controversial CO2 reductions that are now being implemented in the U.S., which call for a 35.5 mpg fleet average in 2016.
At the lighter end of the line, starting with the C30 BEV, a pure battery electric vehicle, will also be offered in Europe at the same time.
Plans for exports of PHEVs and BEVs are still flexible, executives say, and are dependent on the price of fuel, as well as government taxation and subsidy policies governing the marketing of electric cars.
The vast engineering development, manufacturing and sales programs required for electrification are being undertaken against the background of a depressed, profitless global industry, where loss-making Volvo Car is being sold by its parent, Ford Motor Company, to the Chinese maker Geely.
Successful and, more importantly, profitable implementation of electrification now appears key to the survival of all auto companies given the current regulatory environment, which shows no signs of decreasing demands for more fuel efficient and therefore less CO2 belching vehicles. The fact is companies and customers no longer will control their own fates as things are now shaping up. Regulation will dictate a large part, if not all of the market, and survival of companies will depend on how they can comply with an unprecedented amount of government direction.
Smaller companies such as Volvo face a larger challenge in surviving, arguably, if nimbleness as well as possible exemptions and/or company friendly regulation are not ultimately more decisive factors.
Viewed one way, the Volvo commitment to hybrids is a stunning reversal of the traditional disdain that European makers expressed about this Japanese developed technology. All European, and for that matter U.S., automakers are well behind current developments in the ongoing hybridization of the auto industry, which has been underway for more than a decade now.