Volvo has announced it will stop making cars powered by combustion-only engines by 2019. It’s a shockingly smart, if somewhat risky strategy.
The Swedish carmaker once made quirky sedans (my parents owned a 244 just like this one) and built a reputation for safety, then transitioned to a more mainstream, if somewhat uninspiring luxury brand. Ford bought it for $6.5 billion in 1999, and sold it for only $1.8 billion a decade later, after helping crash US sales by more than half.
It’s not Swedish anymore — Geely Automobile Holdings of China owns it, and started manufacturing certain models there in 2013 — and safety may not be the same selling point once all cars can drive themselves.
So it’s going to try to become a green-only brand, kind of like Tesla but appealing to a more diverse array of customers. It’s betting that it can capture buyers who want to wean themselves from fossil fuels, but may want do it with with varying degrees of fervor.
It’s a smart, bold strategy.
It recognizes the fact that combustion engines are going to be around for a long time, primarily because 1) they work reliably, 2) they’re efficient at moving mass from one point to another, and 3) there’s an established infrastructure for building, powering, and servicing them, those side-effects of planet despoliation notwithstanding.
For the foreseeable future, the vast majority of vehicles sold in the world will run on fossil fuels.
Most of the major car brands make some sort of hybrid and/or EV, but they seem somewhat like add-ons to their combustion-only offerings, kind of like Coke offering another variation soda pop for consumers who want no calories, less caffeine, and fewer bubbles.
Purists can find the car of their choice, but few carmakers seem terribly motivated to help everybody else make those decisions. The Conventional Wisdom is that certain people may want to buy green cars, but that’s no reason to actively try to sell them to everyone else who might not.
Volvo is effectively telling the marketplace “you’re going to want to kick your fossil fuels habit at some point, and we’re the brand that will take you on that journey…”
Read the entire essay at Innovation Communicator