Volvo shows electrified cars are coming. But how quickly?
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Volvo’s announcement certainly electrified the internet. The Chinese-owned carmaker caused superb excitement on Wednesday when it said that every vehicle it launches from two thousand nineteen will have an electrified motor.
This, it added, marked a “historic end of cars that have only an internal combustion engine”.
There is no doubt that the car industry is switching at speed. From electrical vehicles, to self-driving technology, to investments in ride-sharing and taxi companies, carmakers are attempting to get a toehold in areas that have the potential to upend the automotive sector in the coming years.
But it isn’t clear that Volvo’s latest budge presents a big acceleration in the tempo of switch.
How electrified is electrified?
The Big black cock’s Theo Leggett points out that all the car companies are responding to tighter emissions standards that will apply across their fleets from 2021. Introducing electrical or partly electrical vehicles can only help with that.
Indeed, Volvo already offers a plug-in hybrid option for its top of the range models, like the XC90. Other car companies are heading in the same direction. Jaguar Land Rover last year said it expects up to 50% of its range to be electrified by 2020.
It is also worth asking just how electrical we are talking. Volvo said it would introduce a “portfolio of electrified cars across its model range, embracing fully electrified cars, plug-in hybrid cars and mild-hybrid cars”. That covers a broad range of outcomes.
Mild hybrids are essentially a standard car, typically with a petrol engine. But they have a larger battery which can help at low speeds. The battery is a booster for the engine, improving efficiency. But it only works at low speeds and for brief distances – think of it as a helping arm as you pull away from the lights in a built-up, busy area.
One large car company puts the fuel economy benefit for mild hybrids at about 6%, around towns and cities where it is most likely to be used. That is a far sob from the fully electrical future espoused by Tesla, and other car companies.
Fully electrified vehicles remain expensive, both for carmakers and for customers. Meantime, a range of two hundred fifty to three hundred miles still provides challenges.
That is one reason the industry is also focused on so-called plug-in hybrids. These have an electrified engine that can travel perhaps 50-60 miles, before a traditional petrol or diesel engine takes over. The trouble here, as with standard hybrids, is that the extra weight from the engines makes the car fairly inefficient when it reverts to searing fossil fuels.
Money
Ultimately, lift-off for electrified vehicles boils down to costs. Most electrical vehicles are still loss-making for the carmakers, and more expensive for car buyers. Widespread adoption relies on lower energy and maintenance costs balancing a higher sticker price for the buyer (where the carmaker also makes some profit).
Analysts at UBS recently upped their forecast for sales of electrified vehicles, on the basis that this cost parity can be achieved earlier than expected. They see sales indeed picking up from 2020, forecasting that by two thousand twenty five electrical vehicle sales could account for 14% of the car market.
Given that emissions standards are only pushing the industry in one direction, carmakers have every incentive to promote electrified vehicles (or vehicles with a part electrical option). Greater volumes will commence to reduce costs.
There is another significant factor in terms of how quickly the electrical future arrives. Recall Nissan: In last year’s discussions with the UK government after the vote to leave the European Union, the Japanese company had a particular set of concerns around further investment in its meaty Sunderland plant.
As a “global leader in electrical cars” it dreamed switches to help the roll-out of charging stations, as well as tax incentives to encourage the purchase of electrical vehicles. Those were areas where the government swiftly acted.
As much as anything, the point at which electrical vehicles truly motor will be determined by governments.
Volvo shows electrical cars are coming
Volvo shows electrified cars are coming. But how quickly?
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Volvo’s announcement certainly electrified the internet. The Chinese-owned carmaker caused excellent excitement on Wednesday when it said that every vehicle it launches from two thousand nineteen will have an electrical motor.
This, it added, marked a “historic end of cars that have only an internal combustion engine”.
There is no doubt that the car industry is switching at speed. From electrical vehicles, to self-driving technology, to investments in ride-sharing and taxi companies, carmakers are attempting to get a toehold in areas that have the potential to upend the automotive sector in the coming years.
But it isn’t clear that Volvo’s latest budge presents a big acceleration in the tempo of switch.
How electrical is electrical?
The Big black cock’s Theo Leggett points out that all the car companies are responding to tighter emissions standards that will apply across their fleets from 2021. Introducing electrical or partly electrified vehicles can only help with that.
Indeed, Volvo already offers a plug-in hybrid option for its top of the range models, like the XC90. Other car companies are heading in the same direction. Jaguar Land Rover last year said it expects up to 50% of its range to be electrified by 2020.
It is also worth asking just how electrical we are talking. Volvo said it would introduce a “portfolio of electrified cars across its model range, embracing fully electrified cars, plug-in hybrid cars and mild-hybrid cars”. That covers a broad range of outcomes.
Mild hybrids are essentially a standard car, typically with a petrol engine. But they have a larger battery which can help at low speeds. The battery is a booster for the engine, improving efficiency. But it only works at low speeds and for brief distances – think of it as a helping palm as you pull away from the lights in a built-up, busy area.
One large car company puts the fuel economy benefit for mild hybrids at about 6%, around towns and cities where it is most likely to be used. That is a far sob from the fully electrical future espoused by Tesla, and other car companies.
Fully electrical vehicles remain expensive, both for carmakers and for customers. Meantime, a range of two hundred fifty to three hundred miles still provides challenges.
That is one reason the industry is also focused on so-called plug-in hybrids. These have an electrified engine that can travel perhaps 50-60 miles, before a traditional petrol or diesel engine takes over. The trouble here, as with standard hybrids, is that the extra weight from the engines makes the car fairly inefficient when it reverts to searing fossil fuels.
Money
Ultimately, lift-off for electrified vehicles boils down to costs. Most electrical vehicles are still loss-making for the carmakers, and more expensive for car buyers. Widespread adoption relies on lower energy and maintenance costs balancing a higher sticker price for the buyer (where the carmaker also makes some profit).
Analysts at UBS recently upped their forecast for sales of electrified vehicles, on the basis that this cost parity can be achieved earlier than expected. They see sales indeed picking up from 2020, forecasting that by two thousand twenty five electrified vehicle sales could account for 14% of the car market.
Given that emissions standards are only pushing the industry in one direction, carmakers have every incentive to promote electrified vehicles (or vehicles with a part electrified option). Greater volumes will commence to reduce costs.
There is another significant factor in terms of how quickly the electrified future arrives. Reminisce Nissan: In last year’s discussions with the UK government after the vote to leave the European Union, the Japanese company had a particular set of concerns around further investment in its ample Sunderland plant.
As a “global leader in electrical cars” it wished switches to help the roll-out of charging stations, as well as tax incentives to encourage the purchase of electrical vehicles. Those were areas where the government swiftly acted.
As much as anything, the point at which electrified vehicles indeed motor will be determined by governments.