Volvo's Electric Push May Not Be as Electric as You Think

It's including 'mild hybrids,' which typically run on gas engines
By John Johnson,  Newser Staff
Posted Jul 6, 2017 11:57 AM CDT
Volvo's Electric Push May Not Be as Electric as You Think
Volvo is going electric, or at least moving in that direction.   (Jonas Ekstromer/TT via AP)

Volvo made big headlines Wednesday when it became the first traditional automaker to announce that all of its cars would be at least partially electric in 2019. The trend away from old-school engines may seem inevitable, but the Wall Street Journal has a sobering stat for electric advocates: Less than 1% of the more than 17.5 million vehicles sold in the US last year were all-electric. That probably won't change unless gas prices rise, charging stations multiply, and government subsidies remain in place. Other developments:

  • Overhyped? The BBC notes that Volvo promised a "portfolio of electrified cars across its model range, embracing fully electric cars, plug-in hybrid cars, and mild-hybrid cars." That's a little vague. Hybrids still use combustion engines, so it's not all that clear just how "electric" the company will be in 2019. "Mild hybrids" in particular are essentially standard cars whose engines get the occasional boost from an electric motor.
  • Look out, Tesla: Still, this is a sign that Tesla, which rolls out a more affordable all-electric model on Friday, will face "intense competition by next decade" from legacy auto companies, writes a Barclays analyst, per Fortune. He lays out the reasons why, including hybrids sold by other automakers. (Tesla has lost $10 billion in valuation over the last two weeks, notes Quartz.)
  • Transition: Hybrids may indeed be big sellers in the next five years or so, but don't expect the trend to last long term. The reason is simple: "From a cost perspective, it's a bit daft to have both an electric motor and a combustion engine in the car," writes Chris Bryant at Bloomberg.
  • That tax credit: Buyers of electric cars are likely counting on a $7,500 federal tax credit, but a post at Electrek makes a key point: The credit starts being phased out once a particular automaker hits the 200,000-vehicle mark. For Tesla, it's doubtful that would happen by the end of the year, but potential buyers will want to pay attention in 2018.
  • China's role: An analyst at Autotrader tells the Washington Post that Chinese ownership of Volvo likely played a big role in the shift. The Chinese market is obviously huge, as are concerns there about air pollution.
  • US automakers: Despite the caveats, Volvo's move shows that the "road ahead for carmakers looks increasingly electrified," writes Jonathan Berr at CBS Money Watch. That includes the Big Three in the US: GM has its $35,000 Chevy Bolt, Ford has 13 new electric vehicles in the works, and Fiat Chrysler is planning hybrid versions of the Pacifica minivan and other models.
(More Volvo stories.)

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