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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
20 March 2012
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.
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