Volvo Phasing Out Conventional Car Engine

volvo goes full electric

The former Swedish car manufacturer currently owned by Geely, a Chinese multinational announced its bold plans to abandon the conventional car engine (the internal combustion engine that is) by 2019. Volvo’s chief executive officer has a bold target in mind: to sell 1,000,000 electric vehicles and hybrids by 2025.

It appears that Volvo’s CEO just decided in his infinite wisdom that the conventional car engine is old news and the future is for the bold, beautiful and state-subsidized (that’s taxpayer’s money by the way) uber-high tech companies like Tesla. The thing is, Tesla just announced earlier this week its latest model, Model 3 respectively, which is ready to enter mass production.

Henceforth, the Chinese owned Volvo stated  on Wednesday that all of its models starting with 2019 will be either hybrids or full electric. Judging from its discourse, Volvo seems to be a pioneer among world’s major automotive makers, being the first getting ready to ditch the good old internal combustion engine. Let’s see how it works out for Hakan Samuelsson, Volvo’s CEO, who said that the company’s latest move “marks the end of the solely combustion engine-powered car,” and “When we said it, we meant it. This is how we are going to do it.”

Between 2019 and 2021, Volvo hopes to take the world by storm with 5 brand new models, hybrid and fully electric alike, of which 2 will be designed and built by its performance-car department Polestar. The other three will be “regular” Volvos, whatever that means.

The electric car was made possible by governments imposing stricter and stricter emissions regulations, i.e. they’re not the consequence of the free market. Also, all electric vehicles are heavily subsidized by the same governments. Analysts believe that starting with 2025, EV’s will become more affordable due to rising costs of  developing conventional engines, as automotive makers are struggling to cope with government imposed fatwas regarding emissions.

Tesla’s latest Model 3 which will hit the world this week has a starting price of $35,000, which is more than twice compared to the price of a regular gas/diesel operated vehicle (think VW Golf, Ford Fiesta, Honda Civic etc) having 3-4-5 times the autonomy of an EV (and many other advantages), but let that go.

The thing is, Tesla is a novelty item for the rich. How many households are “tesla” only households? I’d bet nearly zero. Until the charging time and availability of EV’s rivals conventional cars, it’s a no go for the majority of Americans and the rest of the world for that matter.

Unless the states and FEDs begin taxing electrics and hybrids for the miles they are driven, owners of diesel and gasoline vehicles will be paying more than their fair share of highway taxes. In addition to tax credits buyers get for purchasing them, electric/hybrid drivers escape some or all of the highway taxes all others pay. I mean, this is not competition, but crony capitalism, the “feral gummint” deciding who wins and who loses.

Now, if you’re going for an EV, just don’t keep the car too long because the cost to replace the batteries, which will eventually need replacing, is going to more than make up for any savings by not buying gas over the years.

Now if you’ve bought the car because you don’t want to pollute the environment, well sorry to break the news to you but the cost to the environment from the lithium-ion battery production and the additional cost of fuels burnt to generate the electricity for charging are going to be greater than the cost to the environment from a regular gas engine.  It is the dirty little secret the electric car marketers don’t want customers to know.

The auto industry has already gone nuts because of Musk and Tesla. But if you drive an EV and need a recharge you might have to wait in line. Will Tesla share charging stations with Volvo, GM, Ford, BMW and others?No they will not share. The infrastructure for electric vehicles is just not there. If you converted every parking meter to a universal recharger, it would be a start.

These will be urban and high end suburbia options only. A gasoline powered auto has a vented hole known as a fill neck. Stick in any hose and you have 500 miles of driving going forward in 2 minutes, in scorching heat or snow (EV batteries die pretty quick in extreme temps). You cannot hook a Tesla up in 2 minutes. Battery cool down, other people waiting, your battery is about to die and you are 45 minutes deep in the line. Zero emissions sounds like a nice idea, but it is not practical yet.

To put it another way, as the Japanese would say “Rots of Ruck!”

The timing on this is very interesting, since gasoline prices are now the lowest they’ve been in twelve years and, adjusted for inflation, are cheaper than they were in the 1950s. The big question is whether Tesla is actually leading a trend or its high valuation is a one-of-a-kind thing (read bubble). And I’d bet it’s almost certainly the latter. It’s “cool” to own Tesla stock, as governments and mercantilists are hard-selling government interventionism to define winners and losers. It’s abnormal, something very odd about a company whose share value is way higher per car sold than the actual vehicle selling price.