Chinese-owned automaker Volvo announced that it plans to phase out internal combustion-only engines by the 2019 model year. From then on, Volvo intends all of its cars to be hybrids or electric. As the trend towards electric cars grows, will Volvo establish itself as a market leader in hybrids and electrics, or will it shoot itself in the foot by abolishing internal combustion-only cars before their time is up?
Volvo and Hybrids
Volvo, founded in Sweden, has always been at the forefront of the development of hybrid automobiles. It's ECC concept car built in 1992 was the first attempt at hybrid technology, combining a gas turbine engine with an electric battery. While never making it to commercial production, the research that went into creating the ECC could prove useful once it switches its production over to hybrid and electric vehicles.
It is interesting that Volvo is making such a radical move so early, leading to questions about whether Volvo’s move is because it sees consumer demand picking up, or whether it hopes to profit from pressure put on automakers by governments to build more electric vehicles.
Electric Revolution Fueled by Governments, Not Markets
One thing to remember is that the reason automakers are moving so quickly to hybrid and electric vehicles is not because of consumer demand but because of government regulation; fuel economy standards forced on automakers by governments have just about outlawed the continued development of internal combustion engines.
Earlier fuel economy standards resulted in the development of more fuel-efficient engines that produced as much or more horsepower than older engines, wringing out as much energy as possible from each gallon of gasoline. To the radical environmentalists who sought to use fuel economy standards to eliminate gasoline engines, that was no good. Standards had to be raised high enough and quickly enough that internal combustion technology could not possibly catch up or achieve such high numbers.
Automakers have seen the writing on the wall, which is why they are introducing new hybrid and electric vehicles to meet the new fleet fuel economy standards. Rather than fighting the regulations, they are giving in, with some car companies even encouraging further moves towards hybrids and electrics because they know that they have an edge over their competitors.
Meanwhile, consumers, where they have the choice, still prefer larger and more powerful cars. Fuel efficiency is a bonus for a small subset of car buyers, but with gas prices down from their highs and continuing to decline, fuel efficiency isn’t quite the issue that it used to be. Particularly in the United States, with vast distances between cities and rural populations that require the ability to haul loads, SUVs and pickup trucks remain incredibly popular.
Moving to hybrid and electric vehicles would significantly hamper the amount of traveling that people could do by car or the amount of stuff they could haul from place to place, making them more dependent on other means of transportation or shipping. It would be a step backward to replace internal combustion vehicles with hybrids or electrics that don’t offer anywhere close to the same distance or hauling capacity. Will consumers eventually rise up and say enough is enough, or will more and more automakers go the way of Volvo?