With low gasoline prices, consumers have shown their preference for trucks and SUVs, while passing on the growing number of energy efficient hybrids and electric-powered vehicles on the market.
Even so, Volvo sees electrics as the future and has announced that within three years all of its vehicles will be powered by a hybrid or electric engine. It's saying good-bye to the traditional internal combustion engine.
The company said the change will go into effect with the 2019 model year.
“This is about the customer,” said Håkan Samuelsson, President and Chief Executive of Volvo Cars. “People increasingly demand electrified cars, and we want to respond to our customers’ current and future needs. You can now pick and choose whichever electrified Volvo you wish.”
But sales figures tell a different story. In its latest accounting, Kelley Blue Book (KBB) reports the average transaction price for all-electric vehicles declined nearly 10% year-over-year, suggesting dealers had to discount them to move them off the lot. The average sale price of hybrids was down a smaller 1.7%.
Positioning for the future
But Volvo appears to be positioning itself for the future. And while gasoline prices may remain in their present range for years, consumers may come to see the advantage of using even less of it.
Volvo says it will launch five completely electric cars between 2019 and 2021, three bearing the Volvo nameplate and two under the Polestar brand, Volvo Cars’ performance car division.
The new models will be supplemented by a range of gasoline and diesel plug-in hybrid and mild-hybrid 48-volt options on all models. Volvo says it represents one of the biggest shifts to electrified car offerings of any car maker, perhaps putting it on a collision course with Tesla.
Coinciding with Volvo's announcement, Telsa says its first "lower priced" Model 3 will roll off the assembly line by the end of this week. While a standard Tesla electric-powered vehicle has a sticker price of $100,000 or more, the Model 3 will sell for around $35,000.
Tesla has said that it plans to produce 5,000 Model 3 vehicles per week at some point this year and increase that to 10,000 vehicles per week in 2018.