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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.


Who cares what Volvo says, or even what cars they offer.
It's a free market; buy what you want.
- Yah, I know, you want to tell OTHERS what to buy – and tell Volvo what to make.

I believe EVs are the answer but I am starting to worry more, that 2 million EVs x $10,000 per car incentive is too costly.

What do we get for the $20B?

Reduced oil consumption? Insignificant.

Earlier solution to the battery cost/weight shortcoming? Maybe, somewhat;

The Prius is 10 years old and only the free spirits at UCSB think they make fiscal sense; EV market penetration seems to be waning.

And no, $15,000 incentive is NOT the answer.


Who cares about EVs? Nobody buys them. Not in Sweden anyway. Sales statistics from last year shows that just over 100 EVs were sold. EVs must make substantial improvements in many areas to become attractive and the price must come down. “…struggle to pass 1% market share by 2020.” Maybe this is true. Now EV proponents on this website are mad at the Volvo boss for telling the truth.


Small battery PHEVs are the way to go [IMHO] - like the PHRV Prius. "ordinary" hybridisation would be nearly as good.
Both could be combined with diesel engines that many european cars already have.

The trick will be to get the most bang for your buck in terms of delta mpg vs $K. If you were able to add launch assist and the ability to crawl along in heavy traffic, that would be a worthwhile improvement.

EV driving below 30-40 mph would be the next step and so on.
As the batteries get cheaper, they can get larger (year by year). People could have the option of selecting a larger or smaller battery as they felt fit, much in the way larger engines are available on most cars currently.


Agree! I can see some potential in HEVs and PHEVs but currently not for EVs, except for niche customers. For sure, diesel HEVs/PHEVs will come in Europe. The higher price of the diesel engine could partly be compensated with simplification of the electric drive system and the engine itself (e.g. by reducing the number of cylinders), just as Peugeot and others have shown. The price differentiation for the HEV/PHEV category of vehicles could mainly be in the size of the batteries and secondly, in the choice of the ICE. You could, for example, get a gasoline PHEV with somewhat larger batteries than a diesel PHEV; at equal price in both cases. The gasoline PHEV would get better economy (fuel & electricity) in city driving and the diesel PHEV on the highway. There should be a market for both options but I am afraid that the main market in the foreseeable future will be much greater for HEVs with small batteries and somewhat later also for hydraulic and kinetic hybrids. One example is Volvo. Customers are not directly lining up for the PHEVs that they will start to sell shortly. In contrast, Toyota has shown that there is at least a sizeable market for HEVs, although it has so far mostly been limited to one car model (Prius).

Thomas Pedersen

In an article on this site a couple of years ago (I can't find it...), a spokesman for one of the German automakers basically said that:

"(paraphrasing) Given a finite amount of batteries available (and money to pay for it!), the more cars you distribute those batteries over the greater total fuel savings, you get."

This makes sense because of i) greater utilization of battery capacity, ii) ICE downsizing and iii) slashing the least efficient driving modes of ICEs, such as idling and low-load driving with powerful engines. In that respect, the suggestion of mahonj to allow crawling at <10mph in traffic with the ICE off is a brilliant idea. Of course, all hybrids do this, but what if micro-hybrids could also do it? If the beefed-up starter motor were strong enough to push the car forward, corresponding to the creep of an automatic transmission?

Another feature I would like to see is fuel cutoff at coasting. With the right driving technique - and the right road/traffic modes - the are potentially significant fuel savings there. But only for those of us who get a kick out of efficient driving (not necessarily slow driving!). Again, I'm talking about micro-hybrids.

VW were showcasing with their E-Golf prototype how much can be saved with this driving technique. I have also heard of some crazy drivers in the US who turn off the engine manually on the freeway for short intervals. Extreme Hypermiling, I believe it's called.


If we are looking for Sustainable Personal Transportation, two options come to mind. One is biomass to liquid fuel and the other is solar. Both are actually solar, but that is another discussion.

Thomas Pedersen

Biomass to liquid has yet to prove that it is sustainable. Areas put to use for energy crops would be better of left on their own to be reclaimed by nature in my opinion. Now that would be a huge CO2 sink, to watch huge trees grow where once there was plowed land. Or prairie - which is self-sustainable.

Modern agriculture has problems with soil degradation, and soil is for practical purposes a non-renewable resource. It takes between 200 and 1000 years to generate one inch of soil [Lutgens and Tarbuck, Essentials of Geology, 2008].

Most biomass crops have an energy conversion rate (sunlight to hydrocarbon - sugar, starch, etc.) of just 0.3%. Sugar canes and similar plants are an exception with a conversion efficiency around 8%, but they only grow in strong sunlight where it is warm year-round.

All just circumstantial evidence, I know, but something smells rotten about bio-fuels.

I say we get the bulk of our energy need for personal transportation from electricity (solar, wind, Thorium) and stretch the fossil oil resources another 300-1000 years. And conserve them primarily for aviation - everything else can run on batteries/gas/pulverized coal (ships).


Broin is turning corn cobs into ethanol. Shell is turning natural gas into synthetic fuels. Tall grasses are being grown producing 4000 gallons of synthetic gasoline per acre.

There are people that say something negative, no matter what the idea, I guess they think that they are deriving the truth through arguing. We can argue until gasoline is not available at the pump, then what good did all the arguing do? Action speaks louder than words.


I guess some people believe that real soon now 200 million cars are going to become electric. Take off those binoculars that see out 40 years and look at reality, what are we going to do in the mean time?

THINK people, don't just become true believers while we run out of available oil at a price we can afford, there is no gasoline at the pump and you stand there and say we should have gone electric.


The only thing that will make people stop driving is to make petrol very very expensive or unavailable.

Short of war, this is not possible in a democracy.

Making petrol very expensive will get people into more economical vehicles. The problem is how to do this.

If you do it quickly, it will cause a great deal of pain for less well off people.

If you do it slowly (say over 10 years), to enable people to replace cars with more economical ones as they would anyway, you commit political suicide, UNLESS you can blame some outside force (like the EU or OPEC (or Wall St (?)).

You could argue that this has been done over the last 50 years in Europe and it has been reasonably successful.

People in Europe knew that their governments needed the cash and accepted the taxation - now we have 50 mpg cars so it does not matter so much. The Japanese have done the same, but they love frugality - it is in their psyche.

Frugality is NOT in the American psyche, so it will be harder to bring it in over there.

People may (or may not) have the right to personal long range mobility, but they definitely do not have the right to drive 3 ton SUVs just to go to work. $8 / Gallon would test that "right".

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