Volvo CEO says there are no ifs, ands or buts about move to EVs

New Volvo Cars CEO Jim Rowan has set a high standard for the first model that debuts under his leadership. He wants the replacement for the XC90 to get Volvo “recognized as a very credible next-generation electrified car company.” The new flagship SUV is a key part of the automaker’s rapid shift toward becoming an electric-only brand, a move that is guiding every hiring, investment and design decision the company makes -- including its pending exit from industry group ACEA. Rowan is confident that going all-electric will also pay dividends in the U.S. -- where some rivals expect the transition to be slower -- because he figures that if Tesla did it, why can’t Volvo? He discussed this and more with Automotive News Europe Managing Editor Douglas A. Bolduc.

The second-generation XC90 was the beginning of your predecessor Hakan Samuelsson’s successful run as Volvo CEO. Will your soon-to-be-revealed third generation of your flagship SUV give you a chance to signal the start of your era as chief executive given that it will have a new name, a new design and a new platform?

As a CEO, you get those accolades, but I have never worked in a successful company that doesn't have a massively successful team behind the CEO. A lot of the same people who were masters of their craft for the last XC90 are still within the company and helping us build the next-generation vehicle. What I would love to see is that the car gets us recognized as a very credible next-generation electrified car company.

Since starting at the company in March, what have you seen that makes you confident Volvo can reach its goals of being electric-only by 2030 and getting halfway there by 2025?

That direction remains solid and it’s a great strategy for us. We set ourselves an ambitious goal and when you do this you are saying there are no ifs, ands or buts. That is the direction of travel. That means every hire that we make, every investment decision that we make, every design choice for our cars that we make are geared toward achieving that strategy. That helps us as a company stay focused on where the end game is. Whereas I think some competitors are still trying to figure out how quickly they can get there and whether they can ride two horses at the same time. We don't have that ambiguity. I can feel it in the organization. People get it and understand where we are heading.

Why do you believe the U.S. will be ready for Volvo’s all-electric future by 2030, especially since Mercedes recently told U.S. dealers it expects EVs to only account for about 50 percent of sales by then?

First of all, we are starting to see the U.S., even at a government level, start to lean into that shift. Secondly, the simplest comparison is, well, Tesla managed it. We are now looking at things through the lens of electrification. We are totally focused on battery-electric vehicles. There is no reason why that this shouldn't be technically possible.

What about Europe?

We are seeing strong demand for our BEVs (battery-electric vehicles), specifically in Europe where we are starting to reach that inflection point. I think the mindset of the consumer is more progressive toward BEVs than in some other parts of the world. But this mindset shift will accelerate globally as well because along with being great for the environment the vehicles offer a nice driving experience in terms of the technology.

How is that helping get more people to switch?

When people talk about electrification, it really is the tip of the iceberg. Yes, consumers that buy an electric car are looking to be more environmentally friendly, but they also expect to get that extra level of connectivity, an upgraded infotainment system and an overall package that offers more modern features and functionality. So, while we classify this under electrification, to some extent it's more about bringing next-generation automotive to the forefront.

Dyson has successfully made everyday products such as vacuums and fans more visually and technically appealing. Cars start out being quite captivating, but electric vehicles have been relatively boring to look at. Can you break that trend with your next EV?

Let's hope so. By the way, I think that's a conversation about lifestyle and the use of the product. This includes the little Easter eggs that you find that cause you to say, "Wow, that's pretty cool." I think that is what has been lacking to some extent. So, let's hope we at Volvo can deliver not only a fantastic product that has great range, is good looking, safe and reliable but that also has a “Wow” factor to it.

Did you get bitten by the automotive bug when you were working with Dyson on its car project?

As an engineer, automotive is one of those big industries that everybody looks to when they are growing up. It's something prevalent in everybody's life from the time they get a driver's license and get that sense of freedom a car provides. In addition, the changes that were happening in the automotive sector around the time that we got involved in our project at Dyson probably highlighted that in a more visceral way. And then you join someone like Volvo, and it becomes amplified to the next level because you get to see the design studios, the future products and all of those exciting things that get the blood flowing.

You are a firm believer in the move to core computing, what we often refer to as creating the software-defined vehicle. Why is that so critical?

When silicon allows us to apply massive computational power to the car then we have to use it to differentiate the car and give customers more and more functionality. We have to write the software that can make the best use of that. At Volvo, where safety is so important, when you look at the lidar, radar, cameras and sensors you need to write the code that can get all of those pieces to work together. Then you need to take that through image processing, so the car recognizes what actually is going on around it and uses its computational power to make really quick decisions to avert danger and prevent accidents. That is definitely worth getting a bed for. That is a great example of how core computer technology lends itself to the safety.

Are there any signs the chip crisis is subsiding?

It's difficult to say because in the automotive industry different companies are using different chipsets and different suppliers. Therefore, what may affect one company may be fine for another. We have seen some gains in the last few weeks and expect some improvement toward the end of the second quarter.

It remains a constant battle, right?

Supply chain turbulence, not just in terms of semiconductors, but also the pandemic continuing to cause lockdowns in places such as China, the awful situation in the Ukraine and rising inflation puts pressure on consumer confidence. So, you have a lot of things happening at the same time, which brings some turbulence.