Automotive News Europe - Talk From The Top Supplement - December 2019 - Cover3

AUTOMOTIVE NEWS EUROPE

TALK FROM THE TOP

and so on. There is a lot of driving going
on in suburbia. So you probably need to
offer more than 400 km of range otherwise you are on the short side. That range
is easier to achieve with a smaller car.
How important is it for Volvo to have
battery cell production in Europe, the
U.S. and China?
It is important because I think there will
continue to be a big backlash against
globalization. I think that is what is behind the current trade wars. We cannot
expect that everything is produced in
China and people in the U.S. and Europe will only work in the service industry. There need to be jobs in Europe
and America for highly qualified workers such as building cars or other industrial products. I'm very glad we have a
production footprint in all three regions
[Europe, the U.S. and China]. The move
toward electrification will help us do an
even better job localizing production
because we can reach a higher level of
local content faster than we can with
complicated combustion engines. Batteries will be localized from the start
and so will electric motors.
Volvo named China's CATL and South
Korea's LG Chem as its electric-car
battery suppliers but a Swedish firm,
Northvolt, is getting started and already has a deal with Volkswagen
Group. Will Volvo also do business
with Northvolt?
They are a potential supplier, but in the
first step we prefer to work with suppliers that can follow us globally and not
just supply us in Europe. We went with
LG Chem and CATL because they will
build battery factories in Europe, the U.S.
and Asia-Pacific.
Is Volvo on track to sell a record
700,000 cars this year?
It's absolutely achievable this year and
our ambition is to reach 800,000 next

The move
toward electrification
will help us do an
even better job
localizing
production.

2019

In Partnership with

Volvo wants plug-in hybrids such as the V60 Recharge to account
for 20% of its global sales next year.

year. We are on the way because we have
never had such a strong product offering.
Why is Volvo determined to change
the vehicle ownership model?
We have traditionally sold cars to customers but we believe they would like
to have mobility in other ways. And it
shouldn't be overly complicated. They
want the freedom to move. To get this
in the past I had to go to the dealership
with a lot of money because I bought
a car in cash. Then I could get a loan.
Then I could lease it. What will be very
attractive in the future is paying a flat
subscription rate for the product. You
still get the freedom to move because
this car is at your disposal. After three
years if you like it you keep it for three or
four more years. If you want a bigger one
you change to a bigger one. If you don't
want it anymore you cancel the contract.
That's what you get with Care by Volvo.
Will this business ever be profitable?
There is absolutely no reason why this
should not be as profitable as leasing.
A capital investment of 50,000 euros
is a lot more than committing 500 euros a month. This makes Care by Volvo
especially attractive to younger people.
Our Care by Volvo customers are 10
years younger than our typical customers. They normally have good jobs and
a decent cash flow but they don't have
50,000 euros to invest in a car.
Has sustainability risen to the same
level of importance as safety at Volvo?
Yes. It is really important that we treat
sustainability the same way we treat
safety because that's a very concrete
way of expressing what we're trying to

achieve. Safety is part of the mindset at
Volvo. We don't need to have task forces
or special projects around safety. People just know this is part of our business.
What other parallels do you see between safety and sustainability?
A combination of market forces, technology and international regulations
have really driven car safety to improve
in the last 50 years. Why shouldn't that
also work for sustainability?
How will Volvo cover the cost of the
investments needed to cut the company's carbon footprint?
One thing we will do it carve out our
combustion engine business and put
it together with Geely to fully focus on
future powertrains. That's one way that
we can afford the investments we are
making to become climate neutral, by
prioritizing. We have to keep the investment into r&d at around 5 percent or
6 percent of revenue.
When will Volvo's U.S. plant start producing a battery-electric vehicle?
In 2022.
The market for EVs in Europe and the
U.S. still seems a bit sketchy. Do you
have real confidence in EV sales?
Yes we do. This is part of the beauty of
Volvo. We will not stop making conventional cars. We will have both in parallel.
Of course, it would be a bigger bet if you
would stop production of conventional
cars and rely on a big uptake for EVs. On
the other hand, every EV we will sell is an
additional car to our overall volume. We
are quite confident that EVs will contribANE
ute to our growth.

www.autonewseurope.com

http://www.autonewseurope.com

Automotive News Europe - Talk From The Top Supplement - December 2019

Table of Contents for the Digital Edition of Automotive News Europe - Talk From The Top Supplement - December 2019