{"id":21209,"date":"2017-11-10T20:45:42","date_gmt":"2017-11-11T01:45:42","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/is-the-world-on-the-cusp-of-an-electric-vehicle-revolution-volvo-thinks-so\/"},"modified":"2017-11-10T20:49:58","modified_gmt":"2017-11-11T01:49:58","slug":"is-the-world-on-the-cusp-of-an-electric-vehicle-revolution-volvo-thinks-so","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/is-the-world-on-the-cusp-of-an-electric-vehicle-revolution-volvo-thinks-so\/","title":{"rendered":"Is the world on the cusp of an electric vehicle revolution? Volvo thinks so."},"content":{"rendered":"

Is the world on the cusp of an electric vehicle revolution? Volvo thinks so.<\/h3>\n

The Swedish automaker has announced that all new Volvo models will sport an electric motor by 2019.<\/p>\n

Reacting to Climate Change<\/h3>\n

Increasing awareness of global climate change caused by human activities has catalyzed the rapid development of electric vehicles. The Netherlands has passed legislation to ban the sale of conventional cars with internal combustion engines (ICEs) by 2025[i]<\/a> and Germany has followed suit with a ban by 2030[ii]<\/a>. Even less developed nations India and China are contemplating a similar electric vehicle-only mandates[iii]<\/a>.<\/p>\n

Electric Vehicles Are the Future<\/h3>\n

Electric Vehicles are an important means to reduce the impact of climate change because they contribute no direct carbon emissions and are typically produce fewer life cycle emissions than do conventional vehicles[iv]<\/a>. This benefit is further amplified if power is generated by renewable sources like solar or wind.<\/p>\n

Sales of electric vehicles are expected to grow significantly to over 60 million vehicles by 2040, and overtake those of conventional ICE vehicles by 2038[v]<\/a>, as shown in Figure 1. Additionally, the cost of electric vehicles is expected drop below that of conventional ICE vehicles by 2025[vi]<\/a>.<\/p>\n

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Figure 1: Sales of Electric and Internal Combustion Engine Vehicles (Bloomberg New Energy Finance)<\/p>\n

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Volvo\u2019s Ground-breaking Announcement<\/h3>\n

In July 2017, Volvo announced that \u201cevery Volvo it launches from 2019 will have an electric motor\u201d[vii]<\/a>. Volvo is the first of the conventional automobile manufacturers to electrify their business model, and has garnered the company substantial positive press coverage for doing so. In the short-term, this move has allowed Volvo to focus their limited R&D budget on electric vehicle technology. Over the next decade however, this transition will allow the company to gain market share from the leading electric vehicle manufacturers Tesla and BYD.<\/p>\n

Impact on Volvo\u2019s Supply Chain<\/h3>\n

The disruption caused by electric vehicles will send a ripple through the entire automotive supply chain. The impacts of electrification on the Volvo\u2019s automotive ecosystem are as follows[viii]<\/a>:<\/p>\n