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Volvo Car Corporation challenges EU’s goals and tactics on cutting CO2 emissions; CEO says electrified vehicles will struggle to pass 1% market share by 2020

In a talk at the seminar “EU Debate on Electromobility” organized by Volvo Car Corporation and held at Autoworld in Brussels, Stefan Jacoby, President and CEO of Volvo Car Corporation, said that jobs, investment and competitiveness in the European car industry could be threatened by the European Commission’s approach towards vehicle electrification.

EU targets for cutting carbon dioxide emissions are being jeopardized by the absence of harmonized incentives to consumers, he suggested. Another key issue is the urge for continuous support to automotive research and development, including electromobility.

Volvo Car Corporation urges the EU to coordinate incentives whilst supporting research and development. The European automotive industry risks losing the present technological leadership if this doesn’t happen. In the long-term, this jeopardizes our industry’s competitiveness and European jobs.

—Stefan Jacoby

Jacoby also raised concerns about the viability of the European Commission’s White Paper on Transport, which states that greenhouse gas emissions in the transport sector will have to be cut by at least 60% by 2050 to achieve the EU’s climate change goals. The paper also calls for the use of conventionally fueled cars in cities to be halved by 2030 and then completely phased out by 2050.

European car manufacturers are facing a very difficult challenge when CO2 legislations requiring electrified cars are implemented without initiatives that make these cars affordable for a growing number of consumers

—Stefan Jacoby

In 2011 fewer than 50,000 battery electric vehicles were sold in in the world, equivalent to a market share of about 0.1%. The figure suggests that the car market will continue to be dominated by traditional combustion-engine models for the foreseeable future.

It is far too early to dismiss the conventional diesel and petrol power trains. We continuously improve their efficiency. In the last two years Volvo has brought CO2 emissions from our diesel and petrol model ranges down by 13 percent.

—Stefan Jacoby

While there has been no official target set for the implementation of electrification within the EU, industry studies indicate that several member states are overestimating the speed at which electrified vehicles are being introduced, Volvo suggested.

The European Commission’s own study, ‘A European Strategy on Clean and Energy Efficient Vehicles’, forecasts only 3-4% market share for battery electric vehicles and plug-in hybrids by 2020, with a rise towards 30% expected by 2030.

Both predictions are unrealistic. Considering the lack of coordinated governmental incentives and the high battery system costs, the market share for electrified vehicles will struggle to pass the one percent mark by 2020.

—Stefan Jacoby

One main reason preventing a rapid increase of electric vehicles on the roads is that the cost for the electrification technology is not being reduced fast enough.

The automotive industry’s cost reduction efforts can’t fully compensate for the additional battery system cost. Pan-European subsidies and incentives are needed to support a successful market introduction. Unfortunately such necessary initiatives are jeopardized by the current debt crisis.

—Stefan Jacoby

Volvo recently launched the Volvo V60 Plug-in Hybrid. (Earlier post.)

The V60 Plug-in Hybrid is a great car and we have seen immense interest from the market, however while we have worked hard to bring the price tag below €50,000 [US$66,000], incentives are needed to reach a broader customer base.

—Stefan Jacoby

Electric mobility must be achieved through cooperation between the vehicle industry, governments, infrastructure providers, electric energy providers and scientific institutions, he suggested. In China, for example, the government has earmarked US$15 billion to support its domestic vehicle industry’s research and development within electrification. This far exceeds the EU and the United States commitment to electrification.



Diesel has already got about 65% of the market. Most of the rest is smaller cars where it is not worth the expense of a diesel engine.
They may well add various elements of hybridisation, from mild up to full over the next decade,especially stop-start.

Unless something dramatic happens with battery costs, we won't see many PHEVs or EVs as they are just too expensive.

And this is with gas (and diesel) at > $8/ US gallon.

The only thing that would really make electric happen would be if they banned diesel from city centres.


Ban all ICEVs (with above 100 g/Km) from city centers...could be rather convincing?


Pathetic. This guy simply wants to get government handouts. Subsidies. Free money.

Car companies are rich enough to fund the R&D themselves. Renault has brought affordable EV's to the market, and they are European. BMW is developing EV's and Daimler has partnered with Tesla.

Why is this guy whining? Lead or get out of the way.

Chad Snyder

And what if he's simply telling the truth, Anne?

Last Friday, Autoweek interviewed the CEO of Coda and his estimates were only 1 to 2 percent EV marketshare for the foreseeable future. Actually, that's what's he's hoping penetration will eventually be, as most industry forecasts are even lower.

The heads of most automakers -- the ones talking to their boards and making long term financial decisions -- have claimed similar numbers. And you don't change the direction of the auto industry over night. Have you really any idea of the scope of the supply chains involved in the auto industry? The time it takes to retool an assembly line, or to move a vehicle from concept to reality?

I'm sorry, but I don't see how simply denying every dissenter, especially ones from the auto industry, is very productive.

A lot of eggs are being put in the EV basket, and if they do fail to live up to the hype, we might, 10 years from now, ask why more wasn't done in the past.

I've been following this game for every 10 years now, and the pace of change has been frustratingly slow. Yet all the while, much more could have been done, if constant, reasonable steps had been taken.

Thus, perhaps instead of attacking the bulk of automotive CEOs that disagree with you, it would be more productive to engage them. Ultimately, governments don't build cars, at least not cost-effectively, businesses do. Governments can run studies, and estimate costs, but even expert contractors seldom nail real world costs. It almost always costs more, and doesn't the government have a poor record in such affairs?

Much more can be achieved today than is being achieved, but moving forward will take well coordinated interaction between government and business. Then there is the pitiful consumer whom refuses to take proactive responsibility for their impact upon the world.


In the U.S. we may have one million EVs among two hundred million cars on the road by 2020. We could be selling as many as 200,000 per year out of 15 million sold in 2020, that is over 1% sales for the year.

That is not bad, it is a matter of customer acceptance. To say everyone should do something is just preaching and saying you should do what I say because I know the way is more than a bit egotistical. If you are a true believer, you can not see why everyone else is not, they must be misguided and can not see.

This is why we need synthetic fuels, as a bridge. If we wait for everyone to be driving electric cars we will find ourselves stuck. There will be less fossil fuels available and few electric cars. I suppose the devoted can say that they told everyone to convert and they should have listened, but that is more egoism.


This study do not take account of hydrogen fuelcell cars. As the hydrogen stations infrastructure start appearing we might see some hydrogen-gasoline hybrid appear or hydrogen-diesel hybrid appear. A big tractor-trailer truck powered by a hybrid hydrogen-diesel ice can be a big improvement in efficiency.



Huh??? What on earth are you talking about? It seems I wrote all kinds of stuff I didn't actually write. Nice straw man attack, though.

Methinks Stefan Jacoby should have a chat with Carlos Ghosn.


1% would be good. Not everyone should buy an electric car. It doesn't make economic sense for everyone. Getting the price down will make it possible for more people to get an advantage from buying an electric car. The way to get the price down is to get above a critical point in production that allows for economies of scale, including the cars, but also batteries and electric drive components. I think there are about 250M personal vehicles in the US, 1% of that is 2.5M. If we had 2.5 million EVs and PHEVs on the road, the price would drop from economies of scale. I am not even including other markets, this is just the US. So how do we do that? Probably subsidies and increased fuel economy standards. I'd like to force GM to produce 100K volts (since we the tax payer own a big part of them) and perhaps they could lower the price to $32,500, which is where the price really should be, but I guess no one wants to do that. I certainly know that GM doesn't really want that car to succeed. It's too bad we are depending on the right wingers favorite car company to change the world for the better. If we could only somehow attach the volts success to a war with great amounts of indiscriminate killing we might actually get the righties support on this.


Quite promising Volt economic perspective. When comparing two cars for my commute pattern Volt ownership cost appears to be lowest.
New calculator:


The first bridge to BEVs is called HEVs and Toyota has built over 3M bridges so far and will build another 1+M this year and probably over 2+M/yr by 2015.

The second bridge to BEVs is called PHEVs. GM and a few others tried to jump the first bridge and go directly to PHEVs and BEVs but did not have as much success as Toyota had.

Successful vehicle electrification may very be a step by step evolution, from HEV to PHEV and finally to BEV.

Toyota has mastered the first step and will soon evolve to the second step, i.e. their 2013 PHEVs...about 15 years after their first mass produced HEV. Toyota may not cross the third bridge and mass produce BEVs before 2020/2022 with higher performance lower cost batteries.

Others have a lot to learn from Toyota om successful ways to vehicle electrification.


BMW seems to be bringing out their sub-brand BEVs just fine all by themselves, first with the MiniE trials, and now with the ActiveE trials (with a lot of happy "Electronauts" blogging about their experiences). By the end of next year their designed-from-the-ground-up i3 will go on sale. Under 2800 pounds and with a 184 lb-ft motor and 100-mile range, they expect to sell a lot of them (and hopefully one to me).

Volvo seems to be behind the curve, and apparently getting to be a little worried about that.

I don't think BEVs are for everyone, or even most people, but for a LOT of people, they represent a big step forward. After that, who knows?

Bob Wallace

Nissan plans on having it's Tennessee EV plant in operation late this year. It is designed to produce 150,000 cars per year. That's about 0.3% of worldwide passenger car manufacturing.

Given that Nissan already has manufacturing in Japan and Nissan/Renault is manufacturing in Europe (where EVs make a lot more financial sense), it sure seems that Nissan alone could easily hit 1% capacity by 2020.

Ford set up their Focus assembly lines so that they could switch between gas, diesel and electric with market demand. Given demand they can increase volume in a matter of days.

I can't see a big problem with manufactures being able to produce more than 1% EVs before 2020 if the market demands.

Now, let's assume Secretary Chu is right. Very soon we see affordable, long range EVs. It's time to buy a new car and you are offered a choice between a $25k gasmobile and a $25k 200 mile range electric - same car, same color, same hub caps, same everything except the kind of 'fuel' you put in it.

Let's also assume that the electric corridor that's now appearing from the Canadian boarder down to the Californian boarder has extended to just about anywhere you want to drive. That means that you could drive 500+ miles a day with only two short stops.

Driving an EV is going to cost your $100 to $300 less per month than buying gas at the pump. And it's not going to crimp your style when you go visit Granny.

Which choice would you make?

Out of 100 new car buyers how many do you think would choose the more expensive to drive gas version? Only one?


EV cars are fully cost competitive at current prices and with the 5,000 Euro subsidy with equal taxation to petrol vehicles on fuel if petrol were about £2/liter.

Battery costs are dropping by around 8% pa and the costs of the rest of the vehicle drop rapidly with volume.

Since the pressure on oil prices with the grwoth of China etc and intermal consumption in the few remaining exporters then it seems likely that costs will cross over well before 2020, even with larger battery packs to enable greater range.

I would therefore give credence to Ghosn estimate of 10% by 2020 and even argue that it is on the low side, and dismiss the views of Volvo, which has priced itself out of any serious market.
At Volvo prices 1% would be high, but others are taking cost our rapidly, in contrast to Volvo's claims.


The new UCLA low cost, very flexible, shock and vibration resistant graphene electrodes ultra capacitors and possibly future much higher performance lower cost batteries could be what Secretary Chu was referring to.

The new graphene electrodes used for (ultra-cap and batteries) could make those two e-storage units almost compatible. Their very high power density would make them ideal for large e-city buses, heavy delivery and garbage trucks, taxis and many other machines.

Bob Wallace

We're operating on scraps of information and sometimes it's hard to decide which bits to trust and which not.

I tend to put more faith into what Secretary Chu has to say than most sources. First, he seems to be a very upright guy with no apparent reason to mislead. Second, he can sign a 'no disclosure' agreement and send a team of bright, knowledgeable people into a lab or plant and see what is actually happening, what's facts and what's hope.

I suspect he's seeing what we won't see for another year or two.

If Secretary Chu is saying much larger range and much lower costs in the next few years I'm willing to assume that is what will likely happen.

If we have range and cost (at least 175 miles and no more than a $3k-$5k premium) by 2015 we'll see a good portion of the market move to EVs that year. When we get half a percent (or even less) on the road for a couple of years 'hesitant adapters' will start to relax and look at the savings.

Give us range and cost by 2015 and the percentage of EVs sold in 2020 will be a function of how quickly manufacturers can change over their assembly lines.

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