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“We can cater to a different audience in other states, and that’s Volvo’s strength. What we’re seeing right now in the U. S. is the takeoff of plug-in hybrids,” Annwall said. “A lot of consumers see this as a gateway to a global market. “-Electric future. “
For more information and the latest market actions, click here to watch this full episode of Yahoo Finance Live.
Swedish automaker Volvo (VOLCAR-B. ST, VLVLY) has announced that its EV sales increased by 70% year-over-year in 2023. Björn Annwall, Deputy CEO and Chief Commercial Officer of Volvo Cars, joins Yahoo Finance Live and Pras Subramanian, Senior Reporter, to discuss Volvo’s doubling down on electric vehicles, its ability to convert consumers to hybrid models, and its partnership with Polestar (PSNY).
“We can play a different audience in different states, so that’s really the strength of Volvo. What we see happening now in the US is really how plug-in hybrids are taking off,” Annwall says. “Many consumers see that as a bridge into a fully electric future.”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Luke Carberry Mogan.
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BRAD SMITH: Despite a likely bumpy road for EVs and EVs, Volvo is plugging into the space by doubling down on its goal of going fully electric by 2030. The automaker saw its EV sales rise as much as 70% in 2023 compared to a year ago, accounting for 16% of its total global sales volume. Volvo also announced that it is considering a conceivable adjustment of its stake in Polestar.
To learn more about the company’s area and performance, we have Bjorn Annwall, Chief Commercial Officer and Deputy General Manager of Volvo Cars, who now joins us along with Pras Subramanian of Yahoo Finance. Well, Bjorn, we were given a chance to move forward with that. Do you see how you perform in the EV area compared to some of your competitors looking to break the mold here?
BJORN ANNWALL: One thing that we’re doing differently than many others is that we have a sole focus of becoming a fully-electric company in 2030 and that means that we have done a lot of structural investment into that space for many years now. And that’s what you see in our numbers now where we grow, as you said, 70% year over year and increased the gross margin in doing so. And I think one thing that’s important, Volvo is a premium brand. We’re focusing on the premium end of the EV markets and that’s where I think you can see quite strong margins. A lot of the discussions on softening EV margins and softening EV demand we don’t see for Volvo.
PRAS SUBRAMANIAN: Hi, Bjorn. This is Pras. So this year you will introduce two more electric vehicles to your portfolio. What do you think makes this scenario right for you, especially in the U. S. ?Is there a U. S. economy? Why is there traction here for electric vehicles where other corporations haven’t gone to do the same?
BJORN ANNWALL: Well, it’s clear that the shift to an all-electric world will happen on other time scales in other parts of the world. And I think even in the United States, other states are moving at other paces. Obviously, the West Coast of the United States is converting faster than the interior of the United States.
And we have a diversity of all-electric cars, but we also have wonderful plug-in hybrids and mild hybrids. So we can perform in front of another audience in other states and that’s Volvo’s strength. And what we’re seeing now In the U. S. , plug-in hybrids are taking off. Many consumers see it as a gateway to an all-electric future.
I mean, maybe they don’t accept as true that having an all-electric car is a complete step. So at first they’re looking for a plug-in hybrid and the next car will be an all-electric car. We know that more than a portion of the car’s energy consumption comes from charged electricity, which means that plug-in hybrids actually have a very high charge and are used more as an all-electric car than an ICE car. Similarly, in the U. S. , we obviously see that there are a lot of consumers who need to embark on an all-electric future.
PRAS SUBRAMANIAN: Bjorn, I know you’ll be offering cars like the XC40 that are hybrid or fully electric. Do you see buyers switching from electric cars to hybrids in the fourth quarter?Does this also apply to Volvo? We were also looking at it with other brands.
BJORN ANNWALL: No, we’re still seeing a strong expansion in electrification, whether it’s the plug-in hybrid aspect or the all-electric aspect. As we said, a 70% expansion this year. And now we make 16% of our global sales all-electric, a figure that will increase especially over the next year and reach 50% already in 2025 thanks to the launch of the new EX30, which is a small premium SUV. and the EX90 that we will produce for global consumption in Charleston, South Carolina.
SEANA SMITH: Bjorn, let’s also talk about the news that’s been published regarding the plans to prevent Polestar’s investment. And, of course, it happens and generates discussions on the street only in terms of time, if there is any data about it. what that means in terms of demand for electric vehicles. Tell us about this strategy and why it makes sense for Volvo.
BJORN ANNWALL: Polestar, first of all, we’re incredibly proud to have founded Polestar. It’s a very powerful logo. And now they’re entering a new phase of their progression where they’re moving from a one-car logo to a three-car logo, launching the Polestar 3 and Polestar four sometime this year and starting shipping them to consumers.
Volvo Cars is undergoing a primary transformation towards an all-electric future, but it is also moving towards a completely different automotive architecture, based on a core computing architecture and software-defined vehicles. As Volvo, we want to focus on this transformation. We are. . . In fact, we are an operating company, not an ownership company. So what we’ve announced now and what we’re going to compare is how, through a method, maybe a dividend, maybe not a method, our ownership of Polestar will decrease.
And instead, Geely Holding will take primary responsibility for Polestar’s owner. They are incorporated as a holding company, a proprietary company. And they are increasingly handed over to an owner company as Polestar moves into the next phase. But it’s vital to emphasise that Volvo and Polestar continue to have a valuable collaboration, whether it’s in engineering for next-generation vehicles, whether in production (we produce at our production facility in Charleston, South Carolina) or commercially to have synergies in our intermediary networks, etc. We are therefore looking carefully at how we can look for those synergies in the future.