Volvo Underestimated Plug-In Hybrid Demand: Will Triple Production
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Volvo also notes plug-in electric car production constraints
Volvo CEO Hakan Samuelsson admitted that the company hugely underestimated demand for its plug-in hybrid cars and now is hard at work to increase the production capacity.Currently, Volvo does not have enough batteries, motors and other components to produce all the plug-in vehicles that it could sell. Further expansion should increase sales by 20-25% by the end of this year. The capacity is expected to triple compared to 2018, which should give the Swedish manufacturer a little room for new and updated models.
We are not happy because we could sell more [plug-in hybrids], he said. We underestimated the demand.
We are tripling the capacity from what we had about a year ago to where we will be at the end of this year.
We are tripling the capacity from what we had about a year ago to where we will be at the end of this year.
Volvo PHEV sales in Europe according to JATO Dynamics:
- 2017: ≈16,000
- 2018: ≈26,800
- 2019: expected growth of 20-25% to 32,000-33,500 according to Volvo
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those numbers are for europe where absurd gas prices make a phev a more attractive proposition.
#3
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PHEVs have significant company car tax advantages, it's unsurprisingy they are popular. You only have to look at the number of Mitsubishi Outlander PHEVs running around - many of which have never been plugged in and still have their charging cables still in the wrappers.
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PHEVs have significant company car tax advantages, it's unsurprisingy they are popular. You only have to look at the number of Mitsubishi Outlander PHEVs running around - many of which have never been plugged in and still have their charging cables still in the wrappers.
EPA solved this issue in the USA and it seems absolutely nobody cares in Europe - it is not something you see even in magazine tests.
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Volvo avoided a slowdown in sales of its plug-in hybrids that stung rivals when Europe’s new WLTP emissions testing regime was introduced because the automaker’s customers for such cars value enhanced performance over fuel economy. Volvo still has very high demand for plug-in hybrids, CEO Hakan Samuelsson told Automotive News Europe. "We are not losing those customers."Samuelsson believes that customers have kept buying plug-in hybrid versions of models such as the XC90 flagship SUV because it offers more than 400 hp of combined power, which is crucial in the highly a competitive segment that includes competitors such as the Audi A8 and BMW X5."Otherwise, it would just be an exercise in reducing CO2, which it is not for us,” he said. “We have a high share of plug-in hybrids because people appreciate the technology."
Volvo sold 26,800 plug-in hybrids in Europe last year, up from 16,000 in 2017, and there was no noticeable decline in the automaker's volume for the electrified models after the new rules took effect, according to figures from market analyst JATO Dynamics.
By 2021 Volvo expects that a quarter of the vehicles it produces worldwide will be plug-in hybrids.
Volvo says that plug-in hybrids currently account for 10 percent to 15 percent of sales in the model lines where they are offered. This includes the XC90 and XC60 SUVs, S90 and S60 sedans as well as the V90 and V60 station wagons.
The company has a waiting time of up to six months for vehicles with the technology because of the high demand, Samuelsson said.European sales of plug-in hybrids, led by the Mitsubishi Outlander midsize crossover, soared 46 percent to 94,999 in the first half of 2018, according to figures from industry association ACEA. That rapid growth slowed starting last September as automakers had to conform to new emissions regulations known as the Worldwide harmonized Light vehicle Test Procedure (WLTP).WLTP is much tougher on plug-in hybrids than the previous emissions protocol, known as the New European Driving Cycle or NEDC. Volkswagen, Mercedes-Benz and Porsche were among automakers that temporarily halted sales of some of their plug-in hybrid cars in Europe because they were no longer classed as emitting less than 50 grams per kilometer of CO2, the figure below which the car is rated as being ultra-low emission and therefore eligible for tax breaks. At Volvo, models that previously had a CO2 emissions rating of 50g/km rose to 65g/km to 80g/km.The new rating meant that Volvo, like many other automakers, no longer qualified for a number of tax incentives. Felipe Munoz, a global analyst for JATO, expects overall plug-in hybrid sales will continue to decline. “These cars are still strongly dependent on incentives, so any change in the support has a big impact,” he said.
Analyst firm LMC Automotive, meanwhile, believes European plug-in hybrid sales “will get back on track after the WLTP hiccup.” Full-year plug-in hybrid sales rose 21 percent to 174,200 units in 2018, according to JATO.
Volvo sold 26,800 plug-in hybrids in Europe last year, up from 16,000 in 2017, and there was no noticeable decline in the automaker's volume for the electrified models after the new rules took effect, according to figures from market analyst JATO Dynamics.
By 2021 Volvo expects that a quarter of the vehicles it produces worldwide will be plug-in hybrids.
Volvo says that plug-in hybrids currently account for 10 percent to 15 percent of sales in the model lines where they are offered. This includes the XC90 and XC60 SUVs, S90 and S60 sedans as well as the V90 and V60 station wagons.
The company has a waiting time of up to six months for vehicles with the technology because of the high demand, Samuelsson said.European sales of plug-in hybrids, led by the Mitsubishi Outlander midsize crossover, soared 46 percent to 94,999 in the first half of 2018, according to figures from industry association ACEA. That rapid growth slowed starting last September as automakers had to conform to new emissions regulations known as the Worldwide harmonized Light vehicle Test Procedure (WLTP).WLTP is much tougher on plug-in hybrids than the previous emissions protocol, known as the New European Driving Cycle or NEDC. Volkswagen, Mercedes-Benz and Porsche were among automakers that temporarily halted sales of some of their plug-in hybrid cars in Europe because they were no longer classed as emitting less than 50 grams per kilometer of CO2, the figure below which the car is rated as being ultra-low emission and therefore eligible for tax breaks. At Volvo, models that previously had a CO2 emissions rating of 50g/km rose to 65g/km to 80g/km.The new rating meant that Volvo, like many other automakers, no longer qualified for a number of tax incentives. Felipe Munoz, a global analyst for JATO, expects overall plug-in hybrid sales will continue to decline. “These cars are still strongly dependent on incentives, so any change in the support has a big impact,” he said.
Analyst firm LMC Automotive, meanwhile, believes European plug-in hybrid sales “will get back on track after the WLTP hiccup.” Full-year plug-in hybrid sales rose 21 percent to 174,200 units in 2018, according to JATO.
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PHEVs have significant company car tax advantages, it's unsurprisingy they are popular. You only have to look at the number of Mitsubishi Outlander PHEVs running around - many of which have never been plugged in and still have their charging cables still in the wrappers.
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It is mind boggling that EPA has this figured, because in an European mind, US is corporate owned, no customer protection while EU is all about customer protection... then on daily basis we get proven otherwise.
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Companies buy fleets of these cars to take advantage of the tax savings but then forget that you need to teach the drivers how to use them.
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if they're so great and the battery would save a lot of gas, wouldn't the companies have a good incentive to teach the drivers? perhaps the savings aren't so great, plus then maybe they have to pay some of their employees electric bill too. and of course the vehicles are more expensive to begin with and are carting round a heavier battery than a hybrid or regular ice vehicle.
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if they're so great and the battery would save a lot of gas, wouldn't the companies have a good incentive to teach the drivers? perhaps the savings aren't so great, plus then maybe they have to pay some of their employees electric bill too. and of course the vehicles are more expensive to begin with and are carting round a heavier battery than a hybrid or regular ice vehicle.
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Consumers aren't dumb. I have no doubt they know they can plug in their cars to get energy from the grid as opposed to gasoline.
If there are significant tax and/or HOV advantages, then that's reason enough to get a plug-in.
By the way, electricity costs tend to be much higher in Europe, for example I think Germany is $0.35/KWHr as opposed to roughly $0.15/KWHr for the States. So while fuel costs are high, so are electricity costs. Perhaps not that much in the way of savings.
If there are significant tax and/or HOV advantages, then that's reason enough to get a plug-in.
By the way, electricity costs tend to be much higher in Europe, for example I think Germany is $0.35/KWHr as opposed to roughly $0.15/KWHr for the States. So while fuel costs are high, so are electricity costs. Perhaps not that much in the way of savings.
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