Volvo’s Bombshell: All-Electric and Plug-In Hybrid by 2019

Jim Motavalli

Jim Motavalli | Jul 07, 2017

It may not look that way now, but we’re headed for a future in which cars will have plugs instead of tailpipes. According to Bloomberg New Energy Finance, electric vehicles (including plug-in hybrids) will make up a majority of new car sales by 2040.

The gas version of this Volvo S90 is complemented by a T8 "twin-engine" hybrid version. Soon, the gas and diesels will be going away. (Jim Motavalli photo)

The report also says that EVs will be cheaper than gas cars by 2025, and also much cheaper to operate, thanks to low charging costs. They’ll also be better by nearly every measure.

If you were worried that consumers would have to dig deep to buy the new EVs, rest easy. The loaded and techno-savvy Chevy Bolt I’m driving this week costs $35,000 before subsidies, but when the federal and state incentives are combined I could buy one for $25,500. And the Tesla Model 3, at around the same price point, is about to start rolling down production lines.

The Volvo SX90 also offers plug-in hybrid power. Did you know Volvo means "I roll" in Latin? (Jim Motavalli photo)

The recognition that the future is electric is one major reason that Volvo just made its bombshell announcement—all new models from the 2019 model year on will be either hybrid or fully electric. Any gas models remaining in the pipeline then will be phased out by 2024. Volvo spokesman Russell Datz told me, “Volvo is actively working toward a future without internal-combustion engines, and we are the first traditional carmaker to make such an announcement. Electrification is the future for both the Polestar and Volvo brands.”

Volvo is ahead of the pack in taking this bold step, but it won’t be alone for long. I expect other automakers—mindful of VW’s diesel debacle—to follow suit. Maybe they won’t totally give up on gas-only cars, but they’ll offer hybrid versions of their entire product lines, and step up their commitments to battery vehicles.

Want your XC60 with a plug? You got it! (Jim Motavalli photo)

Keep in mind that automakers, even American ones, sell their cars globally. Even if President Trump rolls back the 54.5 mpg fleet average requirement for 2025, there’s still at least two insurmountable obstacles: California’s own clean car rules, and tightening European emissions legislation. The Chinese want cleaner skies, too.

“Chinese ownership of Sweden-based Volvo likely played a role in the automaker’s announcement today,” said Michelle Krebs, executive analyst at Autotrader. “China’s auto pollution problems have prompted a more serious push towards cleaner automobiles.”

Paris when it sizzles: All those tailpipes will go silent after 2040. (Nelson Minar/Flickr)

And then there’s France, which had an announcement of its own this week: The new Macron government intends to ban all gas and diesel burners by 2040. The country’s environmental minister called it “a veritable revolution.” Tony Seba, Stanford lecturer, co-founder of RethinkX and co-author of Rethinking Transportation, told me:

RethinkX research has found that the internal-combustion engine car industry will have been long decimated by 2040. Banning sales of diesel and gasoline vehicles by 2040 is a bit like banning sales of horses for road transportation by 2040: there won't be any to ban. However, France is smart to provide an early signal to business and consumers on this inevitable shift. Barriers to EV adoption will only serve to limit the economic viability of automakers and industry in the future.

Some analysts sound a note of caution. “It’s a bit extreme to say this is the end of the internal-combustion engine,” said Rebecca Lindblad, executive analyst at Kelley Blue Book. “Demand for EVs is still extremely low on a global basis.”

An EV charging station at Portland General Electric in Oregon. There are more than 16,000 public stations in the U.S. now. (Flickr/PGE photo)

Indeed, hybrids are only two percent of auto sales in the U.S. Battery electrics and plug-in hybrids together accounted for 158,614 sales in 2016, which were up from 116,099 in 2015. It’s not a big number in banner U.S. sales years of more than 17.5 million. But the rapid pace of battery development, including what could be a major advance into cheap solid-state cells, points clearly to an electric future. The automakers are certainly seeing it that way, and are looking past SUV world domination to a far different landscape.

“Most automakers expect the share of electric cars to grow quickly as the technology improves, prices fall, and public charging stations become more commonplace,” reports the New York Times. But those stations are already ubiquitous: There are 16,130 stations and 43,490 public charging outlets in the U.S. now, reports the Alternative Fuels Data Center.

Volvo's announcement is an ohmigod moment, and we'll probably look back at it as a watershed. The future is electric, and there's no longer any room for doubt.

Here's video, including an interview with Volvo CEO Hakan Samuelsson:


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