Volvo CEO Jim Rowan warned that other automakers who refuse to give up making gas cars risk “missing the [EV] market.”
Volvo’s EV plan
Volvo plans to go completely electric by 2030. Rowan said on an earnings call last week:
The big problem with industry transitions is if you don’t invest ahead of the curve, then you miss that inflection point, and you’re not ready for when the market changes.
We are investing ahead of the curve.
The market is moving towards electrification, and you best get ready. We’ve been bold enough [to] invest ahead of that inflection point, which we know [will] come.
Volvo’s 2022 revenue was $32 billion, up 17% from 2021. That was the automaker’s highest-ever recorded revenue in its history.
EVs made up 11% of Volvo Cars’ sales, more than doubling 4% in 2021. Volvo’s fourth-quarter EV sales reached their highest point ever at 18%, compared to 6% year-over-year. If Volvo’s entire Recharge lineup of BEVs and plug-in hybrids are included, then they account for 33% of total sales and 41% in the fourth quarter alone.
By 2025, Volvo’s gas and EV models will reach price parity. Raw battery materials, particularly lithium, have been the main obstacle. Rowan said:
That’s pretty much the only thing that stands in the way of full-scale adoption.
We are in discussions with mines and processing factories to get direct access to [lithium] at more predictable costs.
We think Rowan is right. You popped into our heads first, Toyota, because you’re stubbornly sticking with a hybrid path, including gas.
CEO Akio Toyoda, the grandson of Toyota’s founder, will step down in April amid pressure to accelerate EV development.
Incoming president Koji Sato, previously chief branding officer at Lexus, said Toyota will be “accelerating the shift to electrification.” A February 13 Toyota press release states, “Now that the time is right, we will accelerate BEV development with a new approach.” But that release also says:
We will continue an omni-directional approach without wavering from our multi-pathway.
In that multi-pathway, battery electric vehicles, or BEVs, are also an important option.
So Toyota is still hedging its bets. Between these two, our money is on Volvo. But 100% electric is our ideal.
Read more: North America’s largest lithium mine can now break ground – that’s great news for EVs
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