Volvo Boss Predicts a Plug-in-filled Future, but Americans Don't Seem That Keen on the Brand's Largest Greenie
The second-generation Volvo XC90 announced the brand’s confident and triumphant return to the forefront of automotive discourse. With its parental troubles behind it, the 2015 model year XC90 arrived with dignified, upscale sheetmetal and served as a styling template for future models like the S90 and XC60.
It also heralded the brand’s move towards downsized powerplants assisted by electric motors.
The company’s CEO, Hakan Samuelsson, sees a not-too-distant future where plug-in hybrids make up a quarter of its sales — an attainable goal on a global scale, given China and Europe’s fondness for such models. In the United States, though, Volvo’s plug-in XC90 — lately, anyway — seems to be headed in the opposite sales direction as its plug-free model. Slightly odd, as plug-in hybrids are ascendent in America.
Volvo doesn’t feel like spreading itself too thin. Hybrids are the go-to propulsion source for the coming years, it claims; other automakers can chase improvements in gasoline and diesel technology if they want.
“We are slowly but gradually increasing our gasoline engine offer because we strongly believe in gasoline engines with electrification,” said Samuelsson. “We are expanding our range with the T6 plug-in hybrid with less horsepower [than the top of the line T8 plug-in hybrid]. A T5 will come in the XC40 with electrification. That is what we are looking at because in the long run we believe the dominant powertrain will be a gasoline engine with electrification. I think by 2025 that 25 percent of our global sales should be plug-in hybrids.”
In Europe, the take rate for hybrids among 60- and 90-series buyers stands at 15 percent, the CEO claimed.
The U.S. is obviously a vastly different market, and plug-in hybrids, while on the rise, don’t enjoy nearly the same amount of volume. In April, plug-in hybrids accounted for 0.73 percent of the U.S. car market, which is better than the 0.64 percent seen over the first four months of 2017. It’s certainly a step up from the 0.53 percent take rate recorded in 2017.
The top-tier XC90 T8, Volvo’s first plug-in offering on this side of the pond, is a footnote in the U.S. plug-in market, despite the model’s sustained health. Helped by last year’s poor winter sales, overall XC90 volume rose 38.9 percent over the first four months of 2018. Volvo sweetened the pot late last year by offering a no-charge third-row seat in the base model.
Sales of the plug-in model, which boasts an extra 5 miles of all-electric range for 2018 (19 miles total) fell 9.1 percent, year to date. April volume declined 38.6 percent, year over year, to just 89 vehicles. With new plug-in models arriving at a regular clip, the XC90’s share of the American plug-in hybrid market has now fallen below 1 percent. The second-generation XC60 hybrid has outsold it since its first month on sale (January).
Again, different markets and different buyers. Samuelsson isn’t concerned about hybrid popularity in the U.S.; his concern is the coming launch of the new S60, which he claims will be targeted towards “a younger, more dynamic audience.” Built for domestic consumption and export, the S60 eschews an available diesel powerplant.
To help the automaker reach its green goal, all Volvos introduced after 2019 will feature some form of electrification, even if it’s just a 48-volt mild hybrid system that gently assists the gasoline engine in imperceptible ways. The first of many 48-volt Volvos arrives next year.
[Image: Volvo]
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The price difference to add a plug-in feature to an XC90 is so high that it will likely never pay off financially for most buyers. Therefore it is something people would buy to make a statement. As such it can be expected to sell in modest quantities. Comparing Volvos optional plug-in take rates to more bargain price entries like the Form C-max isn't really valid. Here in California, people lease plug-in C-maxs for that precious car pool alone sticker. They may never plug them in, but still get the sticker and a commuter car for a few hundred buck a month.
I owned a 2016 XC90 T8 for a year. Hated it. Loved it when it worked, which wasn't often. I constantly had issues with it and it left my wife stranded on more than one occasion. It spent many days on a tow truck and at the Volvo dealer. The last straw was when we returned home after a long flight after my infant daughter's surgery. Of course, it was dead and wouldn't start. We replaced it with a Yukon XL Denali. The interior isn't as nice as the Volvo, but it has more space, a burly V8 and most importantly, it starts every morning. I told everyone who asked NOT to buy one.