The electric car rewards Volvo with Chinese traction
Volvo closes in strong acceleration the first quarter 2023. The increase in operating profit was 7% to 6.3 billion Swedish crowns (about 55 million euros) and the EBIT margin was 6.6%. But above all the data relating to sales are significant, increased by 10% compared to the same period of the previous year, with the segment of fully electric cars jumping by as much as 157%. Just to get an idea of Volvo’s result, a comparison with the plug-in car sales of the Stellantis group is enough, which grew by 22% in the same period examined.
But why is there such a gap between the two groups in green registrations? The answer lies in four letters: China.
How important is it to be Chinese
Volvo is 82% owned by Zhejiang Geely holding group dal 2010: the Chinese giant immediately injected fresh capital and guided the brand towards the electric transition with an entirely renewed range. A transition supported by the parent company it has made available batteries and microchips low cost just as other European manufacturers were dealing with an endemic shortage of components.
In this sense, the Volvo case is emblematic of what could happen in the near future with European manufacturers in dire straits while Chinese manufacturers (which at the show in Shanghai they presented numerous cars precisely for the market of the Old Continent) growing rapidly in all EU countries.
It is no coincidence that in presenting the data, the Swedish company reaffirmed its willingness to “continue with the transformation process towards electric that has been underway for some time with a share of plug-in cars delivered which has already jumped to 18% of the total today, compared to 8% in the first quarter of last year”. “Over the next few years – it continues – Volvo will introduce a greater number of fully electric cars, at least one a year until the middle of the decade, based on new generation electric architectures”.
In the first three months of the financial year, Volvo revenue up 29% compared to the same period of the previous year, reaching 96 billion SEK. The increase is attributable to the double-digit growth recorded in the quarter by sales to private individuals compared to the corresponding period of 2022.
Electric favors the wealthy
That the price of green cars is one of the crucial factors for market development and that the electric car is still a “problem for the rich” this is certified by a study published on “Plos Climate” and led by Berkeley, University of California. It is clear from the research that the electrification of vehicles could bring environmental benefits mainly to affluent neighborhoods, rather than to the most disadvantaged communities. The authors analyzed the implications of California’s green vehicle rebate program, finding that the net primary reductions in pollutants were disproportionately concentrated in less deprived communities than in more deprived ones.
Unless there is a dramatic drop in prices, the authors conclude, “we expect these inequalities to continue to materialize in connection with the gradual fulfillment of the US state’s legislative goal of 1.5 million zero-emission vehicles on the road by 2025.” , even with a greater share of renewable sources of electricity’”. That’s why the authors call for targeted actions to achieve greater uptake of electric vehicles in communities facing the highest exposure to air pollution, along with accelerated clean energy generation, to reduce the inequalities associated with the energy transition.
If this is the situation in California, it is quite easy to predict what will happen in our country in 2035 (when the ban on the sale of diesel and petrol cars will take effect). There is already an old car park in Italy today (12 years on average in age), the electric cars cost 30% more than traditional ones and the share of poor citizens is increasing. An explosive cocktail that will result in a heavy pollution in the suburbs of cities and in the most disadvantaged areas.