Volvo to go electric and hybrid only starting in 2019

All Volvo car models launchedafter 2019 will be electric or hybrids, the Chinese-ownedcompany said on Wednesday, making it the first major traditionalautomaker to set a date for phasing out vehicles powered solelyby the internal combustion engine.

The Sweden-based company will continue to produce purecombustion-engine Volvos from models launched before that date,but its move signals the eventual end of nearly a century ofVolvos powered solely that way.

While electric and hybrid vehicles are still only a smallfraction of new cars sales, they are gaining ground at thepremium end of the market, where Volvo operates and where ElonMusk's Tesla Motors has been a pure-play batterycarmaker from day one. As technology improves and prices fall,many in the industry expect mass-market adoption to follow.

"This announcement marks the end of the solely combustionengine-powered car," Volvo Cars CEO Hakan Samuelsson said.

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The company, owned by Zhejiang Geely Holding Group, said five new models set to be launched in 2019through 2021 three of them Volvos and two Polestar-branded would all be fully electric.

"These five cars will be supplemented by a range of petroland diesel plug-in hybrid and mild hybrid 48-volt options on allmodels," Volvo said. "This means that there will in future be noVolvo cars without an electric motor."

The electric models will be produced at Volvo plantsworld-wide it has factories in Europe and China and isbuilding one in the United States while development costs willbe met from within its existing budget, Samuelsson told Reuters.

"This also means we won't be doing other things. We ofcourse will not be developing completely new generations ofcombustion engines," he said about future investment needs.

Volvo has invested heavily in new models and plants sincebeing bought by Geely from Ford in 2010, establishing aniche in a premium auto market dominated by larger rivals suchas Daimler's Mercedes-Benz and BMW.

Part of its strategy has also been to embrace emergingtechnologies that allow higher performance electric vehicles aswell as, eventually, self-driving cars.

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Only last month, Volvo said it would reshape its Polestarbusiness into a standalone brand, focused on high-performanceelectric cars aimed at competing with Tesla and the Mercedes AMGdivision.

Volvo has also said it will build its first fully electriccar in China based on its architecture for smaller cars whichwill be available for sale in 2019 and exported globally.

Still, Volvo is not alone among traditional carmakers inpushing strongly into electrics and plug-ins;or among premiumbrands in resorting to 48V mild hybrid systems to lower fuelconsumption and carbon dioxide emissions from their combustion-engine cars.

Among them, BMW plans to introduce an electric version ofits popular 3 series in September to meet the challenge fromTesla, Handelsblatt reported last month.

Volvo has also taken steps towards an eventual listing,raising fivebillion crowns from Swedish institutional investorsthrough the sale of newly issued preference shares last year,though the company has said no decision on an IPO has been made.

"It is still an option and a question for our owner,"Samuelsson said.

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