Volvo launched the XC40, its first electric-powered vehicle, amidst media coverage of Swedish activist Great Thunberg and a group of protesters who drew some attention to the climate issue. When the launch event took place, the CEO of Volvo Hakan Samuelsson gave a speech about the role of businesses in stemming the problem of climate change, and he declared that companies could save the planet.
Volvo has set a goal to convert half its fleet to pure-electric vehicles by 2025. This is quite a challenge, given that there are currently no EVs on sale at dealerships as of now. By 2040, Volvo claims that it will sell only electronic vehicles.
Another big change that the company is instituting is a speed-limiting policy. In 2021, the company plans to have a top-speed limit of 112 mph on all of its vehicles. The CEO’s explanation is that there is simply no reason for a person to drive faster than that in a passenger vehicle. Volvo also wants to create a safety feature that automatically limits speed in school zones.
The mostorsport arm of Volvo has been converted into a premium EV brand name. This brand name is not well known outside of Sweden. They feel that they want to create a different brand for high performance in order to focus on safety and responsibility for the Volvo brand image. The company has some plans to integrate some concepts of the two brands in the future.
Volvo is going to make some innovations in the way people buy cars. They believe that car subscriptions could be a more practical method of car driving rather than buying for most drivers. In order to make this point, Volvo recently participated in a car show without bringing any cars. Their goal is to offer 1/5 of their fleet on a subscription basis by 2025.
Volvo’s subscription plan for drivers is called “Care By Volvo.” It is a program where consumers can pay a monthly fee for a Volvo. So far, it is the only subscription car program in the American market that has gained any real adoption by consumers. The company is committing more of its models to the program.
The program has had to deal with some regulatory issues, and it is a very novel concept that is likely to take some time to gain wide acceptance. The regulatory process has been a slow state-by-state process, and some dealers have become aggravated by it as well. Despite the government and dealer misgivings, consumers are catching on to the advantages of the program for them.
The first car offered in the program was their entry-level XC40 crossover, and they later added the S60 sport sedan. They are planning on adding the XC60 and XC90 SUVs in 2020 and several other models. When comparing the monthly costs of buying versus owning, the payments seem to be a better value for some of the larger vehicles.
Customers who opt in for the subscriptions sign a two-year agreement, and they can change to a different vehicle after 12 months. The program initially started at $600 per month. This includes maintenance and insurance along with the car payment itself. Care by Volvo is currently available in 49 out of the 50 states. The exception is New York, which is known as a tough regulatory state for insurance.
