Volvo Australia to Phase out the Diesel Engine in Favour of Hybrid

Volvo Australia will launch a new sub-brand dedicated to electric and hybrid vehicle models at the same time as it prepares to phase out diesel vehicles, in a sign of the changing times in the automotive industry.

The new ‘Recharge’ sub-brand will come into being from 2021 and will encompass all of Volvo’s current and future hybrid and electric models.

‘Recharge’ is the name of Volvo’s latest Australia Plug-in Hybrid Electric Vehicle (PHEV) offering, the Volvo XC40 Recharge, but will take a bigger meaning once future models are available down under.

With numerous hybrid and electric Volvo models having been developed over the past 24 months following the growth in popularity of such vehicles in Europe, Volvo Australia managing director Nick Connor says it’s a question of when not if Volvo will bring the new electric and hybrid models here.

“In the next models, the plug-in hybrids will be applied to everything,” said Connor. “It will be PHEV and BEV cars in the future. We’re just launching the XC40 Recharge so effectively our plug-in range is complete.”

Sales of hybrid vehicles in Australia have hit record highs in 2020, with consumers enticed by the increased fuel efficiency and lower vehicle emissions that comes with the vehicles without the range anxiety of a full-electric vehicle.

“We’ve been selling everything we can get,” said Connor. “As we expand the PHEV offering in terms of model lines, we see more potential.

“We’re running between six and nine per cent across the range with PHEV, but we’re running at around 25 per cent in Europe. We’ve seen it ramp up very quickly. We would see that PHEVs would get up to 20 per cent within the next couple of years.”

However, the success of the more efficient hybrid models has come at a cost, with Volvo Australia expecting to phase out the diesel powertrain sooner rather than later.

“It may well be that we phase-out all diesels in a year or so,” said Connor.

“We will phase out diesel completely… in Europe. We are seeing diesel dry up massively all around the world and even here it’s tapering off very quickly.

“We anticipate that diesel demand will fall off fairly quickly as mild hybrids come along.”

Volvo executives have made the decision to cease ordering any new diesel models, meaning once the remaining stock has gone, that is it.

Sales of diesel engine Volvos have weakened noticeably in recent times, outlined by the XC40 model, where once 65 per cent of sales were diesel, but now accounts for just 40 per cent and dropping.

With the diesel segment set to take on a heavily reduced role, Volvo Australia will now focus on improving stock of its hybrid range.

With increased stock availability expected, Connor predicts that up to 20 per cent of Volvo Australia’s predicted 10,000 sales for 2021 will come from PHEV models, with that number to continue to grow in future years.

Source: | Diesel engines to disappear from Swedish brand’s line-up from mid-2021

27 Oct 2020

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