Volvo Cars announced that every model from 2019 onwards would have an electric motor, making it the first traditional carmaker to call time on vehicles powered solely by an internal combustion engine. Volvo said that it would put electrification at the core of its business. From 2019 it will only make three types of cars: pure-electric, plug-in hybrids, and so-called “mild” hybrids combining a small petrol engine with a large battery. “This announcement marks the end of the solely combustion engine-powered car,” said Håkan Samuelsson, chief executive. “Volvo Cars has stated that it plans to have sold a total of 1m electrified cars by 2025.” The Swedish carmaker was purchased by Chinese domestic carmaker Geely in 2010. The new owners have proven to be a catalyst in the race to electrify its models, as China is already the world leader in electric car sales and Geely is the only Chinese-owned carmaker producing vehicles for the US. Globally, the market for pure-electric cars is tiny, accounting for less than 1 per cent of sales last year, but is growing quickly. Volvo said it would launch five pure-electric cars between 2019 and 2021. Three will come from Volvo while two will come from Polestar, the high-performance unit it launched last month. By 2019 no new Volvo cars will be sold without an electric motor, as internal combustion cars are “gradually phased out”, Volvo said. It also aims to make its manufacturing operations “climate-neutral” by 2025. Source: Financial Times, 7/6/2017, p. 11.

TCGR Note: It is projected that global light vehicle production will exceed 100 MIL/yr by 2020 and if only 1% of vehicle sales were pure electric last year that would be less than 1 MIL/yr in 2016. What is less obvious has been the growth of plug-in hybrids and gasoline-hybrids which are now approaching several million and predicted worldwide to be above 10% p.a. by 2022, mostly outside of the US. Note refiners should think about this impact on traditional transport fuel sales.