Volvo Chief Has A Bold And Controversial Prediction

May. 24, 2020 4:50 PM ET by Jay Traugott Electric Vehicles / 21 Comments

He could be right.

Technological advancements have always driven the automotive industry forward, but never before have these changes come at such a rapid pace. Welcome to the era of electric vehicles, autonomous driving systems, and numerous other mobility solutions. But now there's another wild card that's been tossed into the hand: the coronavirus pandemic. With no need to go into specific details, the pandemic has caused another global disruption. The auto industry has been and continues to be greatly affected and some automakers will adapt to the new reality faster and better than others.

According to a recent Financial Times Global Boardroom conference, via Autocar, Volvo CEO Hakan Samuelsson predicts the pandemic will lead to the end of internal combustion-engined vehicles faster than previously thought.

"Electrification will go faster," he said. "It'd be good to promote new technology - good for governments to support electric vehicles, which are more expensive in the first years." In addition, Samuelsson believes government-run programs like a second "Cash for Clunkers" is "a waste of money."

Bear in mind the Swedish automaker is about to launch the Volvo XC40 Recharge SUV and more EVs are on the way, so no doubt he developed an opinion on the matter long ago. However, the pandemic has altered global demand for new vehicles in general, but once the crisis passes, it would be "naive" to believe customers will rush to buy ICE vehicles.

"Demand in Europe is around 30% what it is normally, but demand in China is 20% above where it was before the virus. If those signals are right, they speak for a good recovery," he said. "I really hope this is the case, and anything else will be a disaster for the business." Another important pandemic-related observation Samuelsson noted is in manufacturing, specifically where automotive parts are built.

"Europe and the US need to have more manufacturing jobs. We need to build cars where we sell them. We can't rely on China to build everything."