Continuing to develop ICE models and EVs simultaneously does not blend well.
Volvo Cars chief Jim Rowan does not think it's a good idea for automakers to continue developing combustion-engined vehicles while also moving towards an all-electric future. Speaking to Automotive News, Rowan believes working on both powertrain technologies simultaneously "risks missing the market." Granted, the Swedish automaker has one of the most aggressive EV strategies in the industry, pledging to be fully electric by 2030 - five years ahead of General Motors.
Rowan also recently said he believes EVs will become less expensive by 2025. But rivals like BMW have yet to commit to an EV-only future firmly, and Rowan is confident that only an aggressive investment strategy will put Volvo in the right place on a global level as the EV demand increases.
"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," he said. "We are investing ahead of the curve."
Volvo is in a position where it can send and receive, so to speak, technologies from other Geely-owned automakers, specifically Polestar, which is already EV-only. And also because Volvo is smaller than most of its luxury rivals, it's more agile and capable of adapting to change.
"The market is moving towards electrification, and you best get ready," Rowan said on the call. "We've been bold enough [to] invest ahead of that inflection point, which we know [will] come."
Late last year, Volvo unveiled the South Carolina-built, seven-seat EX90 SUV, and more variants of it are on the way, as well as new EV sedans and wagons. This aggressive launch strategy, Volvo hopes, will result in half of its sales consisting of EVs by mid-decade, but it won't be easy getting there.
The carmaker's EV profit margins have taken a hit due to increasing battery material prices, such as lithium. "That's pretty much the only thing that stands in the way of full-scale adoption," Rowan said regarding the rare-earth mineral. "We are in discussions with mines and processing factories to get direct access to [lithium] at more predictable costs," he said. The goal is to achieve price parity by 2025.
As for the EX90, demand for the new flagship model has been extremely high despite its nearly $80,000 base price. It's easy to understand why. The 496-horsepower EX90 rides on an all-new platform, has seating for up to seven passengers, and will offer a dual-motor version with AWD when it launches. The EPA gave it a range estimate of up to 300 miles.
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