The transition to a line of all-electric models by 2030 has seen the Volvo Cars campus near Ridgeville see more than double its production capacity, as it and other South Carolina automakers are embracing a gasoline-free future.
The $ 1.1 billion Volvo plant in South Carolina has built S60 sedans since late 2018 and will add the automaker’s most popular model – the XC90 luxury SUV – to its assembly line in 2023. Work has begun to bring global production of the full SUV to the factory, which is building an electric battery factory on site to power its cars.
Anders Gustafsson, president and CEO of Volvo Cars USA, says the Lowcountry plant with 1,500 workers will experience an unprecedented growth spurt in the coming years, as the automaker replaces combustion engine vehicles with electrified cars until the end this decade.
“We have had 100 percent growth (in the United States) over the past five years and we plan on another 100 (percent) in the coming years,” Gustafsson told Yahoo Finance last week. He added that the South Carolina plant will transition from its current low rate of sedan production “to the greatest capacity ever in the US market”.
Anders Gustafsson is president and CEO of Volvo Cars USA. Archive / Grace Beahm Alford / Staff
This means that the 1,600-acre Berkeley County campus will need more resources and workers, especially those proficient in digital technologies.
“We need to double the size of the operation now … really triple the size of the operation,” said Gustafsson of Ridgeville’s website.
Accelerated timeline
Other vehicle manufacturers in the state of Palmetto are watching the electric power trend.
Mercedes-Benz Vans, which makes Sprinter commercial vans in North Charleston, said it will start building an eSprinter for the U.S. market because more customers are demanding environmentally friendly vehicles. Online retailer Amazon, one of the van manufacturer’s biggest customers, says strict emission laws passed in many states are driving away the combustion engine market.
BMW, the state’s largest automaker with 11,000 employees at its Spartanburg county plant, hopes to increase sales of its all-electric and hybrid vehicles this year. The two most popular plug-in hybrids on the Upstate site – the X3 xDrive30e and X5 xDrive45e – sold a total of 47,212 units last year, or 13 percent of the Greer plant’s total production.
The factory has been building batteries for electric vehicles since 2015 and spent $ 10 million to expand its 86,000-square-foot battery room two years ago.
“We want to increase sales of our electrified vehicles by more than half by 2021,” said Pieter Nota, a member of BMW’s board of directors, in a statement in January. “This underscores the importance of electromobility as a major driver of growth for our company.”
No automaker has taken a more ambitious approach to electrification than Volvo. The Swedish company, owned by the Chinese group Geely Holding, estimated that half of the cars it makes for the global market in 2025 – or about 350,000 – will be fully electric and all of its new vehicles in 2030 will run on battery. This is a faster timeline than any other major automaker.
A Volvo Cars employee works at the carmaker’s battery assembly plant in Belgium. Volvo said last week that all new cars it produces by 2030 will run on electricity. Volvo Cars / Supplied
“Electricity is where the premium market share is growing,” said Lex Kerssemakers, Volvo’s head of commercial operations, at a news conference last week.
In the first two months of this year, all-electric or plug-in hybrids accounted for 26.6 percent of Volvo’s global sales – more than 29,000 cars.
The company built its first all-electric vehicle, the XC40 Recharge SUV, in 2020, and last week marked the debut of the C40 Recharge coupé, which will be made in Belgium starting in the fall. The next all-electric Volvo will be a new generation XC90 to be built in Ridgeville.
Higher expectations
The auto industry’s move towards electrification has taken on new urgency under President Joe Biden, who “raised expectations that the United States will offer the kind of incentive that helped make electric cars the fastest growing segment of the European market in the last year, “according to a report in The New York Times.
Volvo acknowledged that its move is based on expected legislation that will toughen weather standards while rewarding companies that meet low or no emissions targets. The automaker also said it hopes that “a rapid expansion of affordable high-quality charging infrastructure” will accelerate consumer acceptance of all-electric cars.
The number of public loading ports has almost quadrupled since the end of 2017 to around 96,500 at the end of last year, according to the website EVadoption.com.
Sales of plug-in light electric vehicles in the United States totaled 296,000 units in 2020. Although it dropped significantly from 331,000 sales in 2019, analysts blame the coronavirus pandemic for the drop. Platts Analytics predicts that sales of electric vehicles in the USA will surpass the 1 million mark in 2025 and will total 3 million units in 2030. Currently, the USA is the world’s third largest market for electric vehicles, behind China and Europe.
Volvo said it would spend about 5% of annual revenue, which totaled $ 31.2 billion last year, on research and development, mainly from electrified vehicles.
“I am totally convinced that there will be no customers who really want to have a gasoline engine,” said Volvo CEO Hakan Samuelsson during a news conference last week. “We are convinced that an electric car is more attractive to customers.”
Volvo Cars says all of its vehicles, including the new C40 Recharge unveiled last week, will run on electricity by 2030. The automaker builds its S60 sedan on a $ 1.1 billion manufacturing campus near Ridgeville. Volvo Cars / Supplied
Gustafsson said the West Coast represents the largest market for Volvo’s electric vehicles, but consumer demand in the South and Northeast has exceeded expectations.
“We see, by far, greater demand and support for electrification,” he said. “That was one of the ingredients for being so bold with the numbers.”
Analysts say Volvo’s longstanding commitment to safety will help the automaker defend what most see as another valid cause – a healthier environment.
“Volvo’s reputation for safety can help overcome some drivers’ potential concerns about the safety of electric vehicles,” Stephanie Brinley, principal automotive analyst at IHS Markit, told Forbes magazine.
“Leadership in electric and efficient vehicles fits perfectly into the conservative image of the Volvo brand, based on a long history of corporate citizenship that respects the community and the environment,” said Brinley. “Valuing safety and also caring for the environment are concerns that can go together for the customer”.
