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Volvo: Hakan Samuelsson is not planning any discounts on online sales of electric cars

2021-03-02T16:52:55.870Z

Volvo Cars will switch completely to electric cars from 2030 - and will only sell them online. CEO Hakan Samuelsson explains in an interview what this means for car dealers and how he wants to make profits with e-cars soon.



Icon: enlarge

Switches completely to electric drives and online sales:

Volvo Cars CEO

Håkan Samuelsson

(69)

Photo: © Ina Fassbender / Reuters / REUTERS

manager magazin: Mr. Samuelsson, you announced today that

from 2030

Volvo

will only sell battery electric cars

.

So far, Volvo has offered a single fully electric car with the XC40 Recharge, and this year another one will be added with the E-Crossover C40.

With this in mind, isn't your plan for full electrification a bit over-ambitious?

Håkan Samuelsson

(69) has been CEO of Volvo Cars since October 2012.

The native Swede was previously the head of the truck manufacturer Man.

Håkan Samuelsson:

I don't think so.

A lot has changed in terms of electrification within ten years, as a look back at 2010 shows.

We spoke to our customers who think electric cars are very attractive.

Of course, we have precise product development plans.

As a first step, we will ensure that half of our models will be fully electric by 2025.

Then we will know what we need to make the Volvo brand fully electric.

And you mean that you won't be leaving any previous car buyers?

I would say that Volvo customers are even more interested in electric drives than the average car buyer.

Volvo has always stood for safety and family orientation - and not necessarily for sports cars.

So I think electrification and sustainability are a very natural complement to what Volvo stands for.

So far, however, your competitors in the automotive sector have made little or no profit from the sale of purely electric models.

How does Volvo intend to work profitably in the future?

You need to look at that over time.

It is currently correct that electric cars have higher costs.

But in four years, when half of our new cars will be electrically powered, we'll have a hybrid version and an all-electric version of an XC90, for example.

I believe that the all-electric version of the XC90 will still have a higher price than the hybrid version.

In 2025, however, the costs for batteries and electric motors will be cheaper internally than those of a hybrid motor.

We will then break even on the cost side.

However, the attractiveness of an electric model for our customers will then be higher than the comparable hybrid drive.

For us, it will also be more profitable than selling traditional engines.

To do this, you are also turning your current sales model upside down: In the future, all-electric cars will only be sold online.

In Germany, the retailers of their competitors have complained that they earn less by selling online.

How have your dealers received the online sales strategy?

I was personally in Germany and spoke to some dealers.

From my point of view, we had a very good and open discussion about it.

We're starting a really new transaction business.

Customers expect more transparency, they want to see which models are currently available, what they offer and what they actually cost.

Customers no longer want to visit multiple dealers to get the best deal.

That's why all of our electric models will have the same price across Germany, and it will be very good.

That will no longer be the list price that could be negotiated.

What role will your dealers play in the future?

In order to offer the same customer experience offline and online, we will also build strong and direct customer relationships with the help of our dealers.

To do this, we will invest in better online platforms, that is our job.

Dealers will handle face-to-face communication with customers.

The cars will continue to be delivered to customers by dealers.

We will have a stronger online presence because our customers want it that way.

What we will not do is offer models cheaper online or give discounts.

Online will be our new way to present our previous cars and all electric cars.

What will Volvo dealers live on in the future?

So far, they have made money from the sale of every new car, including from the service.

That means less business for the lower-maintenance electric cars ...

Our dealers will receive compensation for delivering the car.

Today that is called the new car margin, in the future they will receive a delivery bonus.

Of course, the dealers will continue to take care of repairs.

While this has nothing to do with online sales, electrification will of course reduce the demand for car maintenance.

It's a challenge for all of us.

Will your dealers go along with this easily?

We will offer growth to dealers.

If you take up the challenge, you will grow.

We have recently increased our registrations significantly, including in Germany last year, and we plan to continue to do so.

If you can give customers what they want, they will grow faster than the competition.

The changes for retailers are not that dramatically different from e-commerce.

Volvo’s electrification will not come overnight either.

And what will be left out for the dealers?

In the very long term, our dealers will no longer be able to invest in particularly large car dealerships.

Because in the future we will need quality in our showrooms.

In ten years' time, the new car dealerships will no longer have to be as large and exclusive as they are today, because more will simply be done online.

In many countries, however, the incomplete fast-charging infrastructure also prevents car buyers from buying a purely electric new car.

Is this why Volvo is considering its own investments in the charging infrastructure - like Tesla or German car manufacturers are doing with the joint charging provider Ionity

and their own infrastructure initiatives

?

For the transition we have to make sure that the charging infrastructure is good.

Of course, we can also encourage further investments.

But, in my opinion, the best thing we can do as a car industry is to bring more electric models onto the market.

Then our credibility increases to demand more support for this.

We prefer partnerships.

Most important to us is that Volvo drivers can easily find charging stations and pay there in a very pleasant way.

We will be offering this shortly, via Google's Android software that we use in our electric cars.

What will happen in the near future with your previous flagship SUVs, the XC60 and the XC90?

Will they be electrified on the existing basis, or will they be completely redesigned?

We will set it up from scratch.

Our current two electric car models, the XC40 Recharge and the new Crossover C40, are based on the so-called CMA platform, which has now been redesigned for battery electric drive.

The next step is one or two more platforms that will be an evolution of the previous ones.

However, they will get completely new outer shells.

And the new platforms will then no longer allow combustion engines at all?

No, a platform will also be able to accommodate a plug-in hybrid engine.

But there will also be purely electric cars, such as the C40 crossover that is now being presented.

We will have a portfolio that will enable this transition within ten years.

But we will no longer invest a lot of money in combustion engines or hybrid drives.

We outsource our conventional drives to our own joint venture with our mother Geely.

So Volvo will not have any inheritance from a combustion engine and we will only work on electric drives in the future.

Electric motors and batteries will replace our new core competency and everything we used to have in terms of combustion, performance and fuel injection.

The joint engine joint venture between Volvo and Geely will also supply Daimler with hybrid units.

Could there also be a collaboration between Volvo and Daimler for purely electric drives?

We don't currently have such a plan.

Batteries and electric motors are a new, very important area.

We also have to cooperate, we cannot do everything.

In principle, we are very open to this.

But there are currently no discussions regarding any cooperation with Daimler in this area.

Mr. Samuelsson, thank you very much for talking to us.

wed

Source: spiegel

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