As new EU emission average limits start to bite on car makers’ profitability, Volvo needs to triple its level of plug-in hybrid sales in 2020 to avoid fines.
By any measure, Volvo’s renaissance under Geely ownership has been remarkable, with a range of cars from SUVs to saloons a proper antidote the the Germanic take on a ‘Premium’ model.
But much of Volvo’s resurgence is built on the back of its SUVs, with the Volvo XC90 perhaps the most rounded offering in its sector, the Volvo XC60 the most successful in its sector and the Volvo XC40 the most appealing in its. But therein lies a problem.
As car makers try to avoid potentially huge EU fines for new average emissions limits, Volvo is hampered by not having a full-blown BEV available yet – although the electric XC40 Recharge will arrive later this year – and relying so much on heavy SUVs for its sales. So they’re looking to plug-in hybrids to solve the problem.
Speaking to Automotive News, Volvo boss Hakan Samuelsson said that Volvo are looking to increase the number of plug-in hybrid sales in 2020 three-fold, from around 6.5 per cent of all sales to 20 per cent. Which is a big ask.
According to Automotive News, if Volvo can’t achieve that then they could face fines amounting to up to a quarter of annual operating profit, and analysts are prediction that across the EU’s car makers’ fines could be as much as €14.5 billion. Which, interestingly, is about the net amount the EU is losing from Brexit and the UK’s contribution annually.
If Volvo do manage to triple the number of plug-in hybrids they sell in 2020 then they should avoid fines, but the daft part is that, in the real world, using a plug-in hybrid doesn’t really cut emissions and improve economy by all that much – especially if the plug-ins are used on motorways – despite the daft emissions and economy official testing shows.