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Ford to Establish Hybrid Development Center in Sweden; Volvo Cars to Invest $1.4 Billion in Environmental R&D

Ford Motor, through its subsidiary Volvo Cars, announced it will establish a development center for hybrid systems in Gothenburg, Sweden, to serve Ford’s Premier Automotive Group and Ford of Europe business units.

In a related announcement, Volvo said that it will invest SEK 10 billion (US$1.4 billion) in environmental R&D to improve fuel economy and tailpipe emissions of its global fleet.

Hybrid development center. The hybrid development center will have overall responsibility for the application of hybrid systems into Volvo Cars vehicles globally as well as for ensuring Ford of Europe and brands from Ford’s Premier Automotive Group are able to apply core hybrid systems into their own product plans.

The center will be staffed initially by a mix of 20 leading engineers from both Volvo Cars and other brands from the Ford Motor Company group.

Part of a global initiative by Ford Motor Company to speed the introduction of more fuel-efficient vehicles, the new hybrid development center will build on the experience and expertise that Volvo Cars has built up over many years in developing advanced environmental technology systems, including some of the early hybrid systems, that eventually made their way into the world’s first hybrid SUV, the Ford Escape.

We are very pleased that Ford Motor Company has decided to establish a development-center for hybrid technology in Gothenburg. This shows a strong belief in Volvo Cars and our ability to deliver results in future advanced technologies and underline the fact that Sweden has all the pre-requisites for research and development excellence.

“The hybrid cars of tomorrow will be more sophisticated and much further developed compared with what we see on the road today. And it is likely that we will find high-performance hybrids running on diesels and renewable fuels.

—Fredrik Arp, President and CEO of Volvo Car Corporation

The center’s location will ensure that hybrid technology development at Ford Motor Company takes into account different market trends and customer preferences in regions around the world. While the new center will be located in Gothenburg, each brand within Ford European operations will be responsible for applying new technologies to their own product portfolios.

The team at the new hybrid center will also work closely with Ford’s hybrid development team in Detroit, Michigan, to ensure optimum global alignment and economies of scale.

Environmental R&D. In a linked announcement, Volvo Cars announced the investment of SEK 10 billion (US$1.4 billion) in environmental research and development. The aim is to reduce the total fuel economy and tailpipe emissions of the global Volvo Cars fleet.

The investment initiative will focus primarily on:

  1. The development and deployment of cleaner, more efficient diesel engines, hybrids and alternative fuel vehicles;

  2. The use of light, strong materials like magnesium, aluminium and lighter high-strength steel; and

  3. The introduction of smaller vehicles, while continuing to meet customer expectations for safety in Volvo Cars.

At the Challenge Bibendum 2004, Volvo introduced the 3CC electric concept car, a 3-seater prototype electric vehicle powered by a lithium-ion battery. (Earlier post). At the Challenge Bibendum 2006, Volvo introduced the Multi-Fuel, an extremely clean engine offering high performance, which can run on five fuels (bio-methane; bio-ethanol; natural gas; gasoline and hythane, a mixture consisting of 10 percent hydrogen gas and 90 percent methane gas). (Earlier post.)

Previously, we were able to solve several major environmental problems ourselves with the help of skilled engineers and advanced technology. Today however, our biggest environmental problems—increased carbon dioxide emissions and climate change—require much more than just technical solutions from individual car manufacturers.

All of society has to be involved: decision-makers the world over must pursue sustainable policies, the production and distribution of renewable energy must be improved and last but not least, consumers must to an ever-increasing extent dare—and want—to invest in environmental technology.

Volvo Cars will be an active partner in the highly complex challenge facing society. Our role is to be a premium supplier of sustainable mobility solutions.

—Fredrik Arp

The Volvo Car Corporation, with its head office in Gothenburg, Sweden, has been a subsidiary of Ford Motor Company since 1999. Volvo has approximately 27,000 employees around the world.


Lou Grinzo

While I (of course) sincerely hope this effort leads to Good Things in the automotive industry, I have to say that Ford is giving me whiplash. First they back off the 250K hybrids/year thing, then they make this announcement.

For all the bad press GM gets, I'm increasingly convinced that some of the opinions I've seen in places like BusinessWeek about Ford actually being in worse shape are right.

I'm convinced that we're seeing just the beginning of a years-long period of massive change and uncertainty in the automotive sector. Ford and GM are searching for answers, Toyota and Honda are opening new US plants (Honda in Indiana, Toyota in Texas), and there are technological changes coming fast and furious from all directions.

Too bad we don't have a really good web site to keep track of this stuff. You could call it--I don't know-- Green Transportation Parliament, or something like that.


Ford was just checking to see if all the bashers from yesterday had a set, and would they stand up today and admit they got punked

Bud Johns

What baffles me is that Ford currently uses the same type of hybrid system as Toyota, which is clearly the best in the world at this time. Why not expand it thru thier lineup, as Toyota is doing????


My theory is that they are not as good at selling the image of being green as toyota ... ford does not have a funky looking hybrid only vehicle.

At current prices for gasoline, batteries, hybrids, etc a hybrid really isn't cheaper than a non-hybrid.
So when your hybrid looks the same as your non-hybrid and does not offer cost savings... what are people going to buy?

Having a well maintained vehicle, driving less, planting a tree etc etc etc are all good things to do but do not have the same "look at how great I am" status symbol effect of driving a hybrid.


Score another victory for the UAW! Ford would rather spend the R&D money on facilities in Europe and European Engineers then at home to avoid the high labor costs in the USA.

allen zheng

If it wasn't for thier F-Series trucks, Ford would be toast. Their investments in the 90's did not pan out for the most part. Premier Auto Group have largely not lived up to their billing. At one time, Jaguar was projected to have 400,000+ US sales. One can make a case for Volvo and Land Rover though, for their military markets and safety technology.


Trucks and Mustangs are the only things Ford really wants to build. Everything else is afterthought.


Its a part of thier downsizing in america plan. It simply far more valauble investment wise to invest in europe and china then in the us. When they have to make a choice of where to put the money its a no brainer.

Oh and this is exactly why congress has been leary of realy forcing a large cafe increase. They know that would force the need for drastic plant upgrades and that in urn would lead to new plants ELSEWHERE and us plants being closed.


Volvo cars is one of the few companies owned by ford that actually gives profits. It is only fair that this money is being reinvested in Sweden. Volvo cars is still a much more Swedish company than american, so you can quit your whining about downsizing america. And about UAW too, the Swedish union more or less rules the country.


Full disclosure: Magnus is from Sweden.

tom deplume

It says this is and R and D project. They have been R and D ing for enough years to already know how to build hybrids. We and they would be better off if they research how to make batteries, motors, controlers,etc at a lower cost.


What's the use. Oil will be back to $35 brl by this time next year and things will get back to normal.

Rafael Seidl

I wonder if Sweden or the EU sweetened the pot here or if Volvo is simply ahead of HQ in its internal hybrid technology competence. It certainly attests to poor PR that yesterday's and toda's news were not combined in a single press release and the new strategy regarding hybrids explained more clearly.

Considering Ford is up against the likes of Toyota, Honda and GM/DCX/BMW, it might make sense to seek out a large partner such as Citroen/PSA. Production volume is everything when you're lokking to reduce per-unit costs. Fiat is struggling, VW is pursuing its own technology roadmap and Nissan/Renault appear content to let others take the lead in hybrids.

Bud Johns

Rafael, Nissan is using Toyota's technology for an 07 Altima Hybrid. They plan on building 50 grand a year.

John Baldwin

Take CNG, take a hybrid, put them together and you have a long term low CO2, sustainable solution that can be high performance. Make the CNG from bio-methane and you are sorted....transportation for ever, no petroleum.....Volvo and Sweden will get there....


"The aim is to reduce the total fuel economy and tailpipe emissions"

Did you mean "reduce the total fuel consumption and tailpipe emissions" ?

Mark R. W. Jr.

Can Ford actually pull this off and use any research they get into their production. As the state motto of Missouri says: Show me.

Rafael Seidl

Bud Johns -

precisely my point. Nissan is not investing in in-house development of hybrid technology. Its plan was to do only the minimum needed to get their CA/NY/MA/VT/ME ZEV credits. They upped the sales target when they figured out that the hybrid wave has more life in it than they initially thought it would, mostly because oil prices are staying high. What they are doing is opportunistic which is fair enough but a far cry from a technology vision on par with Toyota's.

Roger Pham

It is my feeling that hybrid will be the future of automobiles, and not just a wave. All ICE and even fuel-cell cars will need hybrid technology to maximize fuel economy. Only BEV won't need hybridization, but I don't think there'll be too many BEV's in the future.

It is my prediction that failure to make a full frontal assault on the development of cost-effective hybrid production process and technology will lead to the demise of many car companies to come. Gas-electric hybrid can be very simple: 1) Atkinson-cycle engine coupled to large-size starter-generator in order to power a large-size traction motor. 2) Sufficient battery for optimal regenerative braking and for significant downsizing of the ICE. 3) Torque lockup of the engine to the traction motor during cruise to eliminate loss via electrical pathway. 4) Optional Plug-in or Plug-out capability to increase market appeal. The main difficulty is how to produce a zillion of these at top quality and at low production cost and to sell them at competitive prices and still make a sustainable profit. All right, company can forgo profit until high volume build up, and then, with high volume production, profit will usually ensue.


Hybrid cars will be universal not only because they are more fuel efficient. They are better in any imaginable respect: performance, AWD, dynamic yaw control, brake life, lube oil change intervals, emissions, reliability, comfort… (in my Vancouver Prius taxi cabs are running 24/7 for more then 1million km standard).

Harvey D.

Ford's shifting Hybrid R&D to Sweden, PHEV'S and EV's R&D to Japan and Korea, production to Mexico, Brazil, China, Japan etc is a sure way to get rid of UAW.

GM will most probably do the same in the comming months unless UAW starts to see the light.

It seems obvious that we may be driving a lot of Chinese built PHEV's and EV's by 2010-2012.


Remember all its not labor costs. Swedish, Japanese and German labor is if anything a fair amount more expensive then US labor.

One of the big problems that I see, is the US simply doesn't graduate many engineers. Sociology and African history degree holders might be great conversationalists but they can't design a better car or automation process. Only 5% of college grads in the US are graduate in an engineering discipline.

The EU graduated 180,000 engineers last year, versus 60,000 for the US.

Roger Pham

You have a good point. Engineers and scientists are not treated as well here in the US in comparison to doctors or lawyers, even though engineers have just as tough, rigorous tranining, knowledge and skill requirement as any other higher-paid professionals. The engineering profession has been suffering thru overwork in boom time and layoff in bust time, similar to many in the manufacturing business...and discouragement due to continous downsizing of US manufacturing base and now also R&D base as well. No wonder we are not graduating as many engineers. In Japan, once hired by a major corporation, engineers are practically guaranteed employment for life, and in return, they reciprocicate with high loyalty for their corporation. This explains the consistent quality of Japanese engineering, via continuity of the engineering and manufacturing staff, continuing to learn the skill in one company years after years until they get to perfection. In the US, hiring is fast, but layoff is faster once the economy went sour. Engineers move from company to company throughout their career, thus little continuity in product development. Many engineers in the US quit their profession after several layoffs to go into real estate, teaching, medicine etc. where they can find more stable employment.

The US is very creative and very inventive, but perhaps too complacent in its size and its glorious past to analyze the European and Japanese system in order to avert a looming catastrophe. With so many ethnic and racial groups in the US and widely disparaging in income classes, expect major social unrest and catastrophe when the bubble burst, and especially when the foreign debtors decide to restrict further lending and try to collect on the debt.

allen zheng

You may be right, but over 10 years. Libyan and Iraqi oil are going to ramp up production due to opening up of thier countries to foreign investments, trade sanction lifting, and better infrastructure security. Part of the damage/ lack of progress to Iraqi oil production/refining is due to shadowy groups that do not like the prospect of stable oil markets, ie a big terror/instability premium. This would include elements from Iran (I have put my own money on this). However, higher demand from the developing world will eat up this new suypply in no time at all. Thus a possible moderation over the short to medium term, with a resumed rise by 2016. It will be a shallow N, not a U or V. N beacuse Iran's leadership does not want to reliinquish its nuke program. It is highly suspect, since they are running centrifuges for enrichment of Uranium. There is a risk for a showdown with Iran late 2006-2007. Needless to say, the Straits of Hormuz will be threatened, as will world oil supply. With oil prices skyrocketing, those SUV's and pickups will not be selling well (Ford, and other truck/suv heavy maufacturers will be hurting). IF Iran unleashed its special ops/ terrorists (Hezbollah, Al Quds, etc.), it may target energy/transportation infrastructure around the world. Unless you're stockpiling fuel, your SUV might be stuck for some time. This
Sidenote: US has satellites with sensors for the electromagnetic emissions for high spinning-15,000+ rpm-centrifuges. It works on the same principle of electric blender or vacuum making static on TV screen, but different due to difference of rpm. It is up there, and the point for the demand for the stopage of enrichment is to see if the operation is masking a larger operation nearby/underneath.



I couldn't agree more with what you said. Every industry goes through periods of ups and downs. In ups the US companies are good overall I believe. They get the employees to work harder, but they also give big salaries and bonuses, like in the tech boom.

However when the inevitable down cycle comes the companies are horrific. They 'downsize', offshore and generally eliminate many of their best people. As the industry recovers they are caught flat footed by the Japanese companies which held onto their employees through the pain.

Even developing them. Which if you spend years developing an engineer, that person becomes more and more valuable over time. You don't jus tleave it to chance of hoping to find a perfectly qualified person on the open market when the up cycle comes.

Some US companies don't have this philosophy like Intel hasn't. But even Intel recently has a new marketing guy president who of course is pushing downsizing.

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