Volvo plans to face the future without sacrificing its identity

Big things are happening at Volvo.

The Swedish automaker has impressed lately with a fresh line of cars based on the Lego-like Scaled Product Architecture (SPA) and Compact Modular Architecture (CMA) platforms. The latest models in that line are the 2019 V60 wagon and S60 sedan. The latter is the first Volvo built in the United States; cars are now rolling out of a new factory in Charleston, South Carolina. Volvo is also pushing to add a hybrid or all-electric powertrain to every model by 2019, and is collaborating with Google on infotainment systems.

Anders Gustafsson, Volvo Americas CEO, is at the center of all of this change. During a test drive event for the S60 in California, Gustafsson sat down with Digital Trends to discuss Volvo’s future plans and its uniquely Swedish approach to designing and selling cars.

The S60 is the first Volvo built in the U.S. Why start with that model?

It’s kind of a cycle plan. When we took the decision, it was the only car left in the cycle plan to build here. So that’s really a very easy question.

A lot of automotive journalists are very excited that Volvo will continue to sell the V60 wagon in the U.S. alongside the S60.

You love them!

But the general public seems more interested in crossovers.

So true, but that can change very fast.

So why continue to offer a wagon here. What’s the case for it?

It’s our DNA. Where I come from, Sweden, just the V60 will get 80 percent market share. And, of course, we are very, very strong in Europe around that car. I think we see some opportunities here, too.

The S60 Polestar Engineered is a limited edition, with just 20 available to customers for the 2019 model year. Is there any chance Volvo will build a higher-volume performance version of the S60?

Of course. Swedes, we’re humble, but if customers would like to buy that car, we’re going to build that car. So let’s see. The interest has been tremendous, and I think the design sticks out, in the Volvo way, not too much, and it’s a very fun car to drive. Also, it’s a kind of boost and DNA related to our electrification strategy. I would like to sell more, absolutely.

The outgoing generation of S60 and V60 had full-on Polestar models, without the “Engineered” qualifier. Do see a future model including a more comprehensive package of upgrades, like those old models?

It’s a big part of the business model. If you’d like to add more horsepower, better brakes, it’s a separate structure. Then of course we have the Polestar company [launching as a standalone brand]. That is a different setup. But the engineering part will exist, and we will develop it, and we will use it in the future.

Looking forward a bit, when is the first all-electric Volvo going to launch in the United States?

It will be in 2020. The exact month I do not have.

So at roughly the same time as other markets?

Yes.

As far as preparing for that, are you doing anything with charging infrastructure?

All of us, all of the manufacturers, need to help each other. Because charging is one of the biggest obstacles to growing this kind of responsibility, and it is a responsibility. I’m 100 percent sure that the customers will help us. Because if the customers would like to have BEVs [battery-electric vehicles], I’m sure we’ll find a solution. I’m not so concerned about that.

But we will not try to be super smart and do something by ourselves. We will jump together with a partner, so we can run faster and get scale as soon as possible.

You said customers will “help” you, does that mean you expect them to adapt quickly to fully-electric cars, making the leap from Volvo’s current plug-in hybrids (PHEVs)?

I would like to say the mild [hybrid] or PHEV is something we start with. We’ll build up a kind of knowledge about it, that it’s not complicated. It takes some time to kind of get into that electrification world.

But we really see that the customers are asking for it. Right now, we have a tough time producing in line with demand. We could really send all of the cars to the west coast quite easily and sell all of the cars there, because there is more of a distinct, clear interest. But we have decided to put the volumes in all the regions in the U.S. to build up kind of an interest around electrification.

Will that be the case with the all-electric models, when they arrive?

So too, the price point we have decided on that car can attract a lot of customers. It’s not as expensive as a PHEV, because with a PHEV you need to have one combustion engine and one electric engine, so there’s a bit more cost related to it. I think it’s going to go fast, but the only thing I know is that the customers decide.

We are working with a production capacity, and the capacity of batteries, that is our job, and then we will take it in steps. We should never force something onto a customer. Therefore, we have the PHEV today. Then we’re going to mild [hybrid], 48-volt solutions. So the customer gets used to that, and then we move them over to BEVs.

Will Volvo simply add an all-electric powertrain to an existing model, or will the first electric car be completely new?

First of all, our statement related to ’19 and ’20 is that we are going to have a full electrification strategy for all of our models. That is our first decision.

The [all-electric powertrain] is going to of course be launched in one car from our portfolio today; that exists today. Then it will be rolled out to all our models very, very quickly, because we have a platform strategy that is CMA and SPA [the two platforms that underpin all current Volvos]. That’s the reason why CMA and SPA are so important, because it’s plug and play. It’s just a different top half on the same structure. We’re not going to cherry pick one unique product. That’s not our strategy.

In two years, will customers still be able to get a non-hybrid, non-electric Volvo?

Yes. Combustion engines with efficiency, three cylinders, four cylinders, whatever, are going to continue to exist. We are not so naïve that we can transfer all of our customers faster than our competitors, even though our customers, based on what we know, are quite smart. I think we’re going to be a little bit faster, but we don’t have the scale for it. We will have combustion engines in a combination with 48-volt [electrical systems]. That will help us reduce emissions.

It’s common sense that is based on CAFE [Corporate Average Fuel Economy regulations]. Even if demands here get a little bit softer, the rest of the world is getting tougher. If we don’t fix this, we’re going to get big fines. We need to speed up.

Finally, Volvo is working with Google on future infotainment systems. Why go to a third party rather than continuing to develop these systems in-house?

We go for our strengths. In this area, there are companies that run so much faster, and they are doing a better job in that area. It’s better to find partnerships because they need things from us. We are building very safe cars, and they of course would like to understand what we see in the future. We should learn from each other. That’s really the answer. They are quite good at this, so why should we try to compete with them? We compete with other things instead.