With so many companies focusing on electric vehicles right now, it is only a matter of time until this development affects regular car development. Volvo is one of the few companies openly stating they will no longer focus on diesel engines once the current generation has been completely developed. Moving forward, the company will solely focus its attention on electric vehicles.
Volvo Goes All-in on Electric Vehicles
It is quite interesting to see the new direction Volvo is taking. The company has built up a solid reputation in the automotive sector, thanks to a strong focus on diesel engines. That situation will come to change in the future, as the company will dedicate all of its resources focusing on electric vehicles. Interestingly enough, Volvo CEO Hakan Samuelsson credited Tesla with the growing demand for electric vehicles.
Volvo has some big plans for electric vehicles moving forward, by the look of things. Their first long-range electric car will launch in 2019 and cost between $35,000 and $40,000. While the price may seem steep for most people, it is still an affordable price tag compared to other models. Moreover, this model will be built in China and exported on a global scale.
More specifically, Volvo will build the vehicle by using its Modular Electrification platform. It will be quite interesting to see how things will play out in the coming years. Then again, the current car market shows no reason to continue developing diesel engines, due to demand continually decreasing. At the same time, interest in electric vehicles is on the rise. This business model pivot makes a lot of sense to Volvo right now.
It is important to note Volvo will also continue to develop plug-in hybrid engines and cars moving forward. The demand for both electric and hybrid solutions will only continue to increase, due to lower operating costs. The original investment of such a car may be higher compared to buying a regular car, but the difference in price will pay itself back rather quickly. At least that is what companies such as Tesla and Volvo hope to achieve.
This news comes at an interesting time, to say the least. The European Union is working on new regulations to make electric propulsion mandatory after 2020. Now is the time for manufacturers to start exploring their options in the world of electric and hybrid vehicles. Diesel and gas engines will always remain important, yet their market share will continue to dwindle over the coming years.
For now, Volvo CEO Samuelsson mentioned how the company may halt the production of diesel engines after 2023. That has not been officially confirmed at this time, though, considering it still represents 50% of the European market. Depending on how things evolve, the company will shift its focus. The more aggressive approach toward developing electric engines and cars is a big step for the manufacturer.
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