In the past years, there have been a lot of talks about Elon Musk’s Tesla. How it revolutionizes the auto-industry by introducing the fully electric Tesla models to the market. Despite making fewer cars than its counterparts behemoths Ford and GM, Tesla appears to have a bright future. As Elon Musk’s company market share value soars up, outsmarting and surpassing both Ford and GM in their own ground, leading up to believe about the investor’s clear idea of “what’s next” in term of more efficient energy alternative.
And now, it’s turn to Volvo to take a major part in making history.
Volvo, the Swedish automaker is now betting on the electric engine and phasing the combustion one by 2019. They plan to introduce the first model in the next two years.
While major automakers are still producing combustion-powered engines, none of them are taking risks to bet on the electric cars. An example in the United States, where cars produced still run in gasoline partly due to a cheap fuel price tag.
Volvo’s battery-powered car will be produced first China, before moving to Europe and at a new factory the company is building near Charleston, South Caroline.
Hybrids which combine battery power with gasoline or diesel engines, accounted for about 2 percent of passenger car sales in the United States last year, a figure declines due to low fuel price tag.
And cars that run solely on battery power, like Tesla are still rare in most countries because of high purchase prices, lengthy charging times and limited ranges. Elon Musk promises an entry level for Tesla.
Many carmakers believe that the share of electric cars will grow quickly in the next decade as the technology would improve efficiency, public charging become commonplace. Rapid advances in self-driving cars will also encourage a shift to battery power: It is simpler to link self-driving software to an electric motor than to a conventional engine.
Although no other traditional carmakers have declared their intention to bury the internal combustion engine, virtually all of them are investing in hybrid and battery technology.
Daimler, the maker of Mercedes-Benz cars and trucks would invest $735 million, in a new battery factory it will build in Beijing with its Chinese partner, BAIC Motor.
The major American automakers are moving forward with their own electrification strategies, albeit on a much smaller scale than Tesla and now Volvo.
General Motors, for example, this year introduced the Chevrolet Bolt — a battery-powered model that sells for about $35,000 before government incentives are applied. The Bolt can travel 238 miles on a single charge and will be the basis for other electric models that G.M. expects to add to its lineup.
Ford has sold electric versions of a few mainstream models, but it has not yet developed an all-electric vehicle from the ground up. That is changing, however. The company has said it will introduce a battery-powered S.U.V. by 2020 and will add other electric models thereafter.
The third big domestic automaker, Fiat Chrysler, has lagged. It sells an electric version of its Fiat 500 subcompact car and a hybrid gas-electric variation of its Chrysler Pacifica minivan. But the company has yet to announce any plans to build a new vehicle that is available only as an electric model.
Volvo’s transition will be gradual. It plans to still produce existing models with conventional engines after 2019, but it will no longer introduce new models with the older technology. Depending on demand, Volvo will completely phase out cars powered solely by gasoline or diesel by around 2024.
But by focusing on electrification, Volvo can concentrate its limited research and development resources on new technologies rather than continuing to invest in fuel-powered motors that may become obsolete. With sales of 534,000 cars last year, Volvo is dwarfed by companies like Toyota, Volkswagen and General Motors, each of which sold about 10 million vehicles in 2016.
So, let see how Volvo will perform with its own combustion-alternative strategy in the next two years.