Volvo boss warns against subsidies for non-electric cars
Volvo’s boss claims scrappage-like schemes to subsidise sales of conventionally powered cars after the Covid-19 pandemic risk being “a waste of money”.
Chief executive Hakan Samuelsson, pictured, said only restarting or enhancing existing incentives on electric vehicles (EVs) would help manufacturers and respond to consumer trends.
He also predicted a shift to EVs would be among changes for the automotive industry accelerated by the coronavirus outbreak, reports Electrek and Auto Express.
“If you do scrappage schemes then you should do what you would do anyhow,” he told the Financial Times Global Boardroom virtual conference.
“It’d be good to promote new technology – good for governments to support electric vehicles, which are more expensive in the first years.
“Electrification will go faster. Customers … will ask even more for electric cars and that is speeding up.
“I believe that after coronavirus it would be naive to expect everything to return to normal – to think that consumers will come back into showrooms asking for petrol or diesel cars. And if governments in some way subsidise a return to the old world, it’ll be a waste of money.
“They should use the money to promote new technology, as they were planning to do before coronavirus.”
Samuelsson says online sales with remote delivery and service would also increasingly replace traditional dealership showrooms.
“I think everybody has learned during this shutdown that e-commerce is working and more and more people have experience,” he explained.
“That will encourage people to look for cars online. So, I think the distribution and where you’re selling cars will change. It has been changing already, but that will be changed more rapidly now.
“We need retail partners. We need service partners. The cars will physically need to be delivered and services, but customers expect to get more and more pre-buy information over the web.”
Volvo plans to launch an EV every year for the next five years, with the goal of such models representing half of all its global sales by 2025.
Samuelsson said Volvo, which has restarted production at many of its factories, had been “encouraged” by the recovery of demand for cars in China but admitted the global sales market was well below its regular capacity.
