Volvo moves to hybrid model
Abandons gas-only cars
HELSINKI — Volvo plans to build only electric and hybrid vehicles starting in 2019, making it the first major automaker to abandon cars and SUVs powered solely by the internal combustion engine.
CEO Hakan said the move was dictated by customer demand. It means that in two years, all new Volvo vehicles will have some form of electric propulsion.
The announcement comes as the global auto industry slowly moves toward electric-powered vehicles after more than a century of using engines that burn only fossil fuels. Even though sales are a fraction of conventional autos, companies must sell them to meet fuel economy and emissions regulations. In some markets electric vehicles are seeing increased demand.
Yet the transition to fully electric vehicles will take years. Although Tesla Inc. has announced a $35,000 electric car for the masses and General Motors Co. is selling the all-electric Chevy Bolt for a similar price, less-expensive hybrids are likely to sell more at least in the short run.
Fully electric and hybrid vehicle sales have risen a little since 2012 but still accounted for only 2.6 million, or about 3 percent of worldwide new vehicle sales, last year. Navigant Research predicts that will increase to around 3.7 million in 2018 and to more than 9 million by 2025. That’s about 9 percent of sales.
Volvo’s announcement, coupled with some negative analyst notes and Monday’s announcement of lower than expected production, weighed on Tesla’s stock yesterday. Shares of the Palo Alto, Calif., company closed down 7.2 percent to $327.09.