First Volvo EV comes with free charging
NEW YORK/SAN FRANCISCO: Volvo Cars isn’t just electrifying its line-up to cut carbon emissions. Now the Swedish automaker says it will pay customers to make sure they plug in.
Volvo is tying the launch of its first allelectric vehicle — the XC40 Recharge — to a broader plan for shrinking the carbon footprint of its models by 40% through 2025.
And it’s backing that pledge with a promise to pay the first year’s worth of charging costs for owners of its plug-in hybrids, starting with the 2021 model year.
Volvo placed itself at the forefront of electric car hype in 2017 when it vowed to rid its line-up of cars running purely on fossil fuels by 2025.
“To get there, the company is going to roll out a new battery-electric model every year until 2025, starting with its XC SUVs,’’ chief executive Hakan Samuelsson said.
Those will join a growing range of hybrid models.
Buyers of 2021 model year hybrids will be able to claim a refund for their electricity costs during the first year of ownership based on power consumption data extracted from Volvo’s app for Apple and Android smartphones.
The XC40, which Volvo unveiled in Los Angeles on Wednesday, will have 200 miles of range in the US, 402 horsepower and take 40 minutes to get to 80% battery capacity on a fast-charging system. That compares to the 240-mile range of Tesla Inc’s Model 3 sedan.
Samuelsson said Volvo would start producing its first EV late next year and price it to compete with the Model 3, which starts at about $39,000 but has been selling on average for roughly $50,000.
“It’s affordable for a much broader range of people than higher-priced luxury brand electric cars,’’ said Volvo’s chief technology officer Henrik Green.
“The XC40 is more like a $50,000 car than a $100,000 car,” he said.
Volvo is pushing ahead with its electric ambitions as others in the space struggle. NIO Inc, China’s would-be Tesla competitor, is running short of cash. Jia Yueting, founder of electric vehicle start-up Faraday & Future Inc, filed for bankruptcy. And Dyson Ltd, the famed maker of vacuum cleaners, pulled the plug on its battery-powered car project.
Volvo would not be making a fully electric XC40 if it wasn’t “absolutely sure” the car will be profitable, Samuelsson said.
“It might be lower profit margin initially, but what counts is more mid-term profitability goals,’’ he said.
The bet on electrics comes at a time when the carmaker is coping with a global sales slowdown and tariffs that led to a 30% drop in first-half operating income. To cut costs, Volvo plans to merge engine operations with Chinese parent Zhejiang Geely Holding Group Co Ltd.
Samuelsson said Volvo wanted to increase the appeal of electrified vehicles so they sell without government subsidies — and incentives like free charging for the first year.
“Long term, if this is really going to do something to the climate or the environment, the cars need to be attractive and need to be bought by customers with their own money,” he said.